Executive Summary Blog

Executive Summary Blog

Legal developments affecting professional liability insurers

Category Archives: Notice of Claim

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Insured’s Failure to Provide Notice of Demand Letter Precludes Coverage for Related Lawsuit Noticed in Subsequent Policy Period

Posted in “Claim”, Notice of Claim, Related Claims and associated exclusions
A Washington federal court has held that an insured’s failure to provide notice of a demand letter to its insurer during the policy period in which the letter was received precludes coverage under a claims-made and reported policy for a related lawsuit filed during a subsequent policy period. National Union Fire Ins. Co. v. Zillow,… Continue Reading

Federal Liability Risk Retention Act Preempts Maryland’s Notice-Prejudice Statute for Non-Chartered Risk Retention Group

Posted in Notice of Claim
A Maryland federal court has held that the federal Liability Risk Retention Act (LRRA) preempts Md. Ins. Code § 19-110, Maryland’s notice prejudice statute, in circumstances where Maryland law otherwise would govern a contract issued by a non-chartered insurer.  Mora v. Lancet Indem. Risk Retention Grp., Inc., 2017 WL 818718 (D. Md. Mar. 1, 2017).… Continue Reading

Initial Inquiry Letter from Office of Disciplinary Counsel Constitutes “Disciplinary Proceeding,” Triggering Notice Obligation

Posted in “Claim”, Notice of Claim
A Louisiana appellate court, applying Louisiana law, has held that an initial inquiry letter from the Louisiana Attorney Disciplinary Board, Office of the Disciplinary Counsel received by a lawyer constituted a “Disciplinary Proceeding” under a lawyer’s professional liability policy, triggering an insured’s notice obligations under the policy. Trelles v. Continental Cas. Co., 2017 WL 658249… Continue Reading

No Actual Prejudice From Late Notice Where Insurer Could Not Have Altered Outcome of Claim

Posted in Notice of Claim
The Maryland Court of Appeals, applying Maryland law, has held that an insurer could not show actual prejudice from late notice because it could not have impacted the outcome of the claim.  National Union Fire Ins. Co. v. The Fund for Animals, Inc., 2017 WL 383453 (Md. Jan. 27, 2017).  Although the insured sustained adverse… Continue Reading

Notice by One Insured Does Not Satisfy Notice Requirement for Different Insured

Posted in Notice of Claim, Notice of Potential Claim (Timeliness)
The Ohio Court of Appeals, applying Ohio law, has held that a medical malpractice insurer correctly denied coverage where the insured did not provide notice of the claim until after the policy expired even though the insurer had actual knowledge of the claim from another insured.  Wright State Physicians, Inc. v. The Doctors Company, 2016… Continue Reading

Tenth Circuit Finds Notice of Temporary Restraining Order Against Insured Did Not Constitute Proper Notice of Subsequent Lawsuit

Posted in Notice of Claim
The Tenth Circuit, applying Oklahoma law, has held that an insured’s notice of a temporary restraining order did not constitute sufficient notice of a subsequent lawsuit under a professional liability insurance policy.  Thames v. Evanston Ins. Co., 2016 WL 7228800 (10th Cir. Dec. 14, 2016).… Continue Reading

Architect’s Prior Knowledge Bars Coverage for Professional Liability Claim

Posted in “Claim”, Notice of Claim, Prior Knowledge/Warranty Exclusion
A New York federal court has held that an architecture firm is not entitled to coverage under a claims-made professional liability policy because the insured had a reasonable expectation of liability prior to the policy’s inception date.  University of Pittsburgh v. Lexington Ins. Co., 2016 WL 7174667 (S.D.N.Y. Dec. 8, 2016).… Continue Reading

Absent Prejudice, Untimely Notice Does Not Preclude Coverage if Notice Provided During Renewal Policy Period

Posted in “Claim”, Notice of Claim
The Delaware Superior Court, applying Delaware law, has held that an insured’s failure to provide timely notice of a claim during the applicable claims-made policy period does not preclude coverage when the insured renewed the policy and provided notice of the claim during the renewal policy period, unless the insurer can prove prejudice as a… Continue Reading

Attorney’s Reporting of Alleged Ethics Violations Not “Professional Services”; Eight-Month Delay in Providing Notice Precludes Coverage as a Matter of Law

Posted in Notice of Claim
An Illinois federal district court has granted a commercial general liability insurer’s motion for summary judgment that it had no duty to defend or indemnify an insured law firm or its principals in a defamation action based on the insureds’ failure to comply with the notice provisions in the policy. Sentinel Ins. Co., Ltd. v.… Continue Reading

Seven-Month Delay Constitutes Late Notice as a Matter of Law

Posted in Bad Faith, Defense Costs, Notice of Claim
A Minnesota federal district court has held that an insurer was entitled to summary judgment in a breach of contract suit brought by its policyholder after the insurer denied coverage because the policyholder failed to provide notice of the suit “as soon as practicable” in accordance with the terms of the policy. Food Market Merch.,… Continue Reading

Late Notice Bars Recovery of Claimant’s Unsatisfied Default Judgment under New York Statute

Posted in Notice of Claim
The Northern District of Alabama, applying New York law, has held that an injured party who fails to act “reasonably diligently” in identifying a defendant’s insurer and then “expeditiously” notify the insurer of the claim, as provided in N.Y. Insurance Law § 3420(a), is not entitled to recover under an insured defendant’s E&O policy for… Continue Reading

No Coverage for Claims Made After Statutory Coverage Extension Period Upon Notice of Policy Non-Renewal

Posted in Notice of Claim
The Court of Appeals of Minnesota, applying Minnesota law, has held that claims made after a statutory 60-day coverage extension period after an insured receives notice of policy non-renewal from an insurer are not covered under a claims-made policy.  Minn. Joint Underwriting Ass’n v. Jacy, LLC, 2016 WL 3223180 (Minn. Ct. App. June 13, 2016).… Continue Reading

No Coverage for Lawsuit After Policy Period that Does Not Arise from Notice of Circumstances

Posted in Notice of Claim
Applying Illinois law, the United States District Court for the Northern District of Illinois has held that no coverage was available under an E&O policy for a lawsuit first made after the policy expired because it did not arise out of a notice of circumstances provided during the policy period.  St. Paul Mercury Ins. Co.… Continue Reading

Due to Lack of Notice, E&O Carrier Has No Duty to Indemnify Insured Auto Insurer’s Settlement Payment Stemming from Bad Faith Claim

Posted in “Claim”, Consent to settle/incur defense costs, Notice of Claim
An Illinois federal court, applying Illinois law, has ruled that, due to lack of proper notice, an E&O insurer had no duty to indemnify its insured auto insurance company’s $7 million settlement payment stemming from a bad faith claim in an underlying auto accident lawsuit. Lexington Ins. Co. v. Horace Mann Ins. Co., 2016 WL… Continue Reading

Replacement Professional Liability Policy Sufficiently “Similar” to Original Policy to Prevent Application of Extended Reporting Period

Posted in Notice of Claim
Applying Indiana law, the United States District Court for the Northern District of Indiana has held that a policy which insures the same pool of risk and offers professional liability coverage for the insured law firm for professional acts provides “similar coverage” as that term is used in the firm’s previous professional liability policy despite… Continue Reading

Fourth Circuit Upholds Summary Judgment for Insurer Based on Late Notice Because Insurer Suffered Actual Prejudice Due to Default Judgment

Posted in Notice of Claim
The United States Court of Appeals for the Fourth Circuit, applying Maryland law, has affirmed the entry of summary judgment in favor of an insurer where it received late notice of a suit in which the underlying court had entered default judgment against the insured, finding that the insurer was actually prejudiced by the delay.… Continue Reading

Claims-Made-and-Reported Policies Do Not Violate Louisiana Statute

Posted in Notice of Claim
The United States District Court for the Middle District of Louisiana has held that claims-made-and-reported policies do not violate a Louisiana statute that prohibits insurance contracts from limiting the insured’s right of action against the insurer to a period of less than one year from the time when the cause of action accrues, because claims-made-and-reported… Continue Reading