The 11th U.S. Circuit Court of Appeals on Wednesday upheld a ruling that an insurance agency and agent did not breach an agency agreement with a Hanover Insurance Co. unit by providing untimely notice of an injury suit against a client.

The three-judge panel said in Massachusetts Bay Insurance Co. v. D.C.J.D. Corp. et al. that regardless of an alleged breach of the notice provision, the insurer failed to prove that it directly suffered damages from its failure to know about a lawsuit brought by Larry Douglas and his wife against policyholder Formosa Enterprise LLC.

Worcester, Massachusetts-based MBIC could have, but did not, rely on the expert opinion of Wade Vandiver, who said the insurer’s inability to properly investigate the Douglases’ claims could have impacted the claim’s value, the panel said.

Even if MBIC cited the report, however, the evidence would have only shown that Markey Insurance Group and Michael Branch Henderson might have caused the insurer’s damages.

Markey had an agency agreement with MBIC allowing it to sell policies on the insurer’s behalf.  Markey provided an MBIC businessowners policy to Formosa in October 2017 that was effective through October 2018 and required the policyholder to provide notice of a claim to the insurer “as soon as practicable.”

Mr. Douglas tripped and fell while visiting a business owned by Formosa in June 2018. He and his wife later sued Formosa for the injuries. Mr. Douglas later committed suicide as “a direct result of the pain” from the fall, court records say.

Formosa informed Mr. Henderson about the lawsuit and he informed the policyholder to contact MBIC. Formosa failed to inform MBIC and did not respond to the suit, resulting in a judgment of liability against the company. After learning of the suit, MBIC agreed to settle the suit for the $1 million policy limit.

MBIC sued Markey and Mr. Henderson, claiming they breached the agency agreement by failing to notify it of the suit.

Representatives for the parties did not respond to requests for comment.