The United States Court of Appeals for the Eighth Circuit, applying Arkansas law, has affirmed a ruling in favor of an insurer holding that there was no coverage for a claim made during one policy period but not reported until the following policy period. Pine Bluff Sch. Dist. v. Ace Amer. Ins. Co., 2020 WL 768772 (8th Cir. Dec. 28, 2020). In addition, the court ruled that the doctrines of waiver and estoppel were inapplicable because the claims-made issue went to the scope of coverage, which could not be changed by waiver or estoppel.

The insured, a school district, was named in an EEOC charge filed by a former teacher alleging sexual harassment and retaliatory discharge. The EEOC issued a right-to-sue letter to the teacher, who in turn filed suit against the school district. The charge had been filed during one policy period, but the lawsuit was not filed until the renewal period. The school district did not notify its insurer until the second policy period, and the insurer denied coverage on the grounds that the charge and suit constituted a single claim that was first made during the first policy period but not reported until the second policy period, after the time for notification had expired. The district court granted summary judgment in favor of the insurer, and the school district appealed.

On appeal, the Eight Circuit affirmed the ruling in favor of the insurer. First, the court rejected the school district’s argument that the placement of the “single claim” provision in the Limits of Liability section made it ambiguous as to whether it applied only to prevent stacking. Instead, the court ruled that the relatedness provision aggregated the claims for all purposes under the policy. Here, because the combined claim related back to a claim first made during the initial policy period but not reported until a subsequent policy period, the court ruled that coverage did not exist. Second, the court rejected the school district’s argument that the insurer waived or was estopped from denying coverage because it waited almost a year to address the coverage issue while defending the school district and because it hired separate counsel for the alleged harasser during that period. In so doing, the Eight Circuit noted that the claims-made-and-reported requirements went to the scope of coverage of the policies, which rendered the doctrines of waiver and estoppel inapplicable.