On April 25, 2016, the Supreme Court of Colorado issued a ruling that overruled — or at a minimum restricted — a 2005 decision in which it stated that an insurer could not avoid coverage for late notice without showing that it was prejudiced as a result. In a 4-3 decision, the court held in Travelers Property Casualty Co. v. Stresscon Co.,[1] that where an insured failed to provide notice of a claim prior to reaching a settlement, the “no-voluntary-payments” provision (or “consent-to-settle” provision) in an occurrence policy excused the insurer’s duty to indemnify for the settlement amount. This decision is noteworthy because in its decision in Friedland v. Travelers Indemnity Co.,[2] the Colorado Supreme Court held that an insurer could not deny coverage in a liability policy for late notice, where a settlement was reached before notice without a showing of prejudice. One way to reconcile these two results is to say that the court examined the issue under two different parts of the policy — and in so doing, reached different results. By digging a little deeper into the facts of these cases, however, the analysis is a bit more complicated. This article examines how the court backed away from applying a notice-prejudice rule and why policyholders should take note of this important change in Colorado law.

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