The United States District Court for the Middle District of Florida, applying Florida law, has held that a professional liability insurer was not obligated to contribute to defense costs where it received a letter during its policy period requesting insurance information pursuant to Florida statute, and a lawsuit regarding the incident discussed in the letter was filed after its policy period ended. Lancet Indem. Risk Retention Group, Inc. v. Allied World Surplus Lines Ins. Co., 2016 WL 3906924 (M.D. Fla. July 19, 2016).

Two insurance companies issued professional liability policies to a diagnostics company for successive policy periods. During the first policy’s term, the diagnostics company received a letter from an attorney that stated “[w]e are investigating a claim for damages” and demanded disclosure of all liability policies that could provide coverage for the incident being investigated.  The diagnostics company forwarded the letter to the first insurer, but there was no further communication from the claimant before the end of the first policy period. After the first insurer’s policy expired and the second policy incepted with a new insurer, the diagnostics company was sued in connection with the incident described in the letter. The second insurer defended the action, but the first insurer refused to contribute to defense costs. As subrogee ofthe insured, the second insurer sued the first insurer for breach of contract, a declaration that the attorney’s letter satisfied the condition of “notice of a claim” against the insured, and equitable contribution.

The court determined that the letter did not constitute notice of a claim under the first insurer’s policy. The policy defined “Claim” to mean “a written notice received by an Insured. . .demanding monetary damages or notifying the Insured of an intention to hold an Insured responsible for an Occurrence; or. . .the filing of a civil lawsuit or arbitration proceeding seeking money damages.” The court reasoned that the letter was best understood not as a notice of the existence of a claim for damages but of an investigation to determine whether such a claim existed. The ultimate purpose of the letter was to request information regarding insurance coverage, not to express an intention to hold the company responsible for an incident. In reaching this conclusion, the court relied on policy language providing that notifying the insurer of an occurrence that may result in a claim “does not constitute a [notice of a] Claim.”