Renewal of Claims-Made-and-Reported Period Does Not Extend Claim Reporting Period

Applying Louisiana law, a Louisiana appellate court, has held that renewal of a claims-made-and-reported policy does not extend the time in which an insured must report a claim.  Lalonde v. Vallot, 2014 WL 7003820 (La. Ct. App. Dec. 10, 2014).

On August 5, 2010, the insureds, real estate listing agents, were named as defendants in a lawsuit filed by the insureds’ former client alleging breach of fiduciary duty and negligence.  On June 1, 2011, the former client added the insurer as a defendant in the lawsuit under Louisiana’s direct action statute, and the insurer denied coverage because the insureds did not report the claim in the policy period in which it was first made.

The court held that the policy did not provide coverage for the lawsuit against the insureds because the insured did not report the claim during the policy period in which it was made.  The lawsuit was a claim first made on August 5, 2010 when the insureds received the lawsuit, so the court held that the claim was first made during the policy in effect from January 1, 2010 to January 1, 2011.  The policy required that a claim be both made and reported during the policy period.  Relying on Gorman v. City of Opelousas, 148 So. 3d 888 (La. 2014), the court held that the insurer’s renewal of the claims-made-and-reported policy did not extend the policy’s reporting period.  Because the insureds did not report the claim during the policy period, the court held that no coverage was available for the lawsuit under the policy.