Hanson Production Co. v. Americas Insurance

REAVLEY, Circuit Judge:

The issue in this diversity case under Texas law is whether a surplus lines insurer, in order to avoid its coverage obligations, must show prejudice where the insured has failed to provide prompt notice of a claim. Because we conclude that the Supreme Court of Texas would require proof of prejudice, we reverse.

BACKGROUND

In 1985 appellant Hanson Minerals Company, a Texas corporation, entered into operating agreements pertaining to a Texas oil and gas prospect. In 1989 and 1990, per its agreement with the non-operators, Hanson procured two comprehensive general liability…