Keeping your fingers crossed, with perhaps a little truculence thrown in for good measure, should not guide an insured’s answers in filling out an insurance application. Rather, as the decision in a recent case from federal district court in Florida shows, insureds filling out renewal applications should view the world through a pessimistic eye. Continue Reading Forget the rose-colored glasses when filling out insurance applications
Most professional-liability policies are written on a “claims-made” basis, which provides coverage for lawsuits filed against the insured during the policy period — even for damages caused by some professional negligence that occurred long before the policy was issued (and, perhaps, for some mistake at a time when the insured had no insurance coverage at all).
But as the insured recently learned in Sunshine v. General Star Nat’l Insurance Co., yawning gaps can open up in insurance coverage that was otherwise dutifully purchased year after year through the often-misunderstood, and often-overlooked, mischief wrought by the policies’ “retroactive date.” Continue Reading Retroactive dates punch gaps into insured’s coverage
Insurance policies almost universally require that the insured immediately report any claim made against the insured. In the context of liability policies written on an “occurrence” basis (generally, policies where coverage is triggered at the time of an accident, no matter when the lawsuit is eventually filed by the plaintiff injured in that accident), late notice to the insurer under Oregon law does not destroy the insurer’s duty to defend and cover a loss unless the late notice somehow prejudiced the insurer. See, e.g., Employers Ins. of Wausau v. Tektronix, Inc. (Or. Ct. App. 2007) (refusing to hold that a 12-year delay was prejudicial).
But a recent California case follows a far stricter rule where the policy was issued on a “claims made and reported” basis, which is how most professional-liability (or “errors and omissions”) policies are written. In Alterra Excess & Surplus Ins. Co. v. Gotama Bldg. Engineers, Inc. (C.D. Cal. July 24, 2014), Gotama, an engineering firm, Continue Reading Failing to Timely Report a “Claim” May Leave Insureds with No Coverage