Notice of Potential Claim (Timeliness)

Applying Arizona and New York law, an Arizona trial court has held that a claims-made-and-reported policy unambiguously does not apply where the insured failed to notify the insurer of a claim before the policy’s reporting deadline.  Southwest Energy Systems LLC v. Underwriters at Lloyd’s, London, Case No. 2017-015010 (Ariz. Super. Ct., Maricopa Cnty. Mar. 15, 2018).  Wiley Rein represented the insurer in this case.

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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 Ohio App. LEXIS 5183 (Ohio Ct. App. Dec. 23, 2016).

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The Court of Appeals for the Tenth Circuit, applying Colorado law, has held that an insurer’s denial of coverage to the Federal Deposit Insurance Corporation (FDIC), standing in the shoes of an insured as receiver, does not violate public policy where the insured’s rights under a policy have not vested.  FDIC v. Kan. Bankers Sur. Co., 2016 WL 6440367 (10th Cir. Nov. 1, 2016).  The court also held that the FDIC forfeited two arguments related to policy interpretation on appeal.

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A federal district court in Illinois has granted an insurer’s motion for summary judgment rescinding three consecutive professional liability policies.  This comes after the court determined under Illinois law that the insured attorney made material misrepresentations in each of the renewal applications.  Minn. Lawyers Mut. Ins. Co. v. Schulman, 2016 WL 4988006 (N.D. Ill. Sept. 19, 2016).

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