In a June 29, 2023, decision in Students for Fair Admissions v. Harvard, the U.S. Supreme Court held that the college’s use of affirmative action in its admissions program was unconstitutional. The discrimination case against the college not only went all the way to the Supreme Court but was also the subject of a long-running insurance coverage dispute involving the college’s excess employment practices insurance. In an August 9, 2023, ruling, the First Circuit held in the insurance coverage dispute that the college’s late provision of notice of claim regarding the underlying discrimination lawsuit precluded excess coverage for the claim. This high-profile insurance coverage ruling has some important lessons about the provision of notice to insurers in connection with liability claims. A copy of the appellate court’s August 9, 2023, ruling can be found here.Continue Reading Late Notice Precludes Excess Coverage for High-Profile Harvard Suit
As I have noted in numerous post on this blog (most recently here), among the many different types of fallout from the current coronavirus outbreak are the potentially significant implications for corporate liability and for D&O insurance. In the following guest post, Lawrence J. Bracken, Geoffrey B. Fehling and Lorelie S. Masters of the Hunton Andrews Kurth LLP law firm consider these implications, including the types of claims that may arise and the impact the pandemic may have D&O insurance policyholders and their insurers. I would like to thank the authors for allowing me to publish their article on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to publish a guest post. Here is the authors’ article.
Continue Reading Guest Post: D&O Insurance Issues Arising from the COVID-19 Crisis
This blog’s readers know that a claim arising from the current coronavirus-related outbreak could present a number of insurance-related issues, including, among many others, perennial issues involving timeliness of notice of claim. In the following guest post, Daniel Wolf, an associate at the Gilbert LLP law firm, take a look at notice of claim considerations businesses may want to take into account with respect to potential coronavirus-related claims A version of this article first appeared on his firm’s blog. I would like to thank Daniel for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Daniel’s article.
Continue Reading Guest Post: For Businesses at Risk of COVID-19 Lawsuits, Consider Providing Notice of Circumstance
Regular readers of this blog know that among my hobby horse issues are the various questions surrounding late notice of claim. Timeliness is of course a standard conditions for complying with an insurance policy’s notice requirements. Policies also contain other notice conditions, such as, for example, where the notice must be sent and so on. In an interesting recent ruling, the Fifth Circuit examined a professional liability insurance policy’s conditions of notice, finding that while the timely provision of notice is a material condition, others of the policy’s notice conditions were immaterial, and held, applying Texas law, that the insurer could be relieved of its coverage obligations for the policyholder’s failure to comply with an immaterial condition only if the failure prejudiced the insurer.
Continue Reading Material and Immaterial Conditions of Notice of Claim
As the policy definition of the term “Claim” has expanded in recent years, the range of incidents and procedures for which the policyholder must provide notice to the insurer has also grown. Among the recent expansions has been the inclusion in many policies of a “subpoena” within the meaning of the term “Claim.” As a result, a policyholder’s failure to notify its insurer of a “subpoena” could imperil coverage for a later related lawsuit. However, as a federal district court recently held, applying New York law, the notice requirement is not triggered if the prior “subpoena” does not meet the professional liability insurance policy’s definition of the term “claim,” and, the court further held that the failure to notify the insurer of the subpoena did not preclude coverage for a later suit. The court’s decision sheds interesting light on a number of frequently recurring coverage issues.
Continue Reading Not Providing Notice of Subpoena That Wasn’t a Claim Doesn’t Bar Coverage for Later Lawsuit
Under claims made insurance policies, policyholders must provide timely notice of claim to their insurers in order to trigger coverage. Late notice is among the most common reasons that insurers deny coverage for claims. In order to try to avoid a coverage denial for late notice, policyholders have tried to argue that late notice should not preclude coverage where the policyholder renewed the coverage and where successive policies with the same insurer are in place. In a recent decision, an Ohio appellate court, applying Ohio law, rejected a policyholder’s attempt to rely on this kind of continuity of coverage argument. The court’s decision raises some interesting issues, as discussed below.
Continue Reading Ohio Court Rejects Continuity of Coverage as Counter to Late Notice
Readers know that it doesn’t take much to get me up on my hobby horse about insurers trying to deny coverage based on the late provision of notice. In general, I am against a mere procedural fault causing a complete coverage forfeiture. Every now and then though there is a case where the policyholder’s lack of diligence makes the case against the insurer’s coverage defense very tough. A recent decision out of the District of Minnesota provides an example where the extent and nature of the policyholder’s delay in providing notice of claim made the argument in favor of coverage very difficult. But while the insurer’s denial of coverage based on policyholder’s late provision of notice arguably was justifiable in the case, the circumstances involved still present some important lessons both about notice of claim and about the policyholder’s obligations under the policy.
Continue Reading Late Notice of Claim Precludes Coverage
As anyone involved in the world of D&O insurance knows, a frequently recurring coverage issue is the question of whether or not the insured has provided timely notice of claim as required by the policy. These kinds of disputes takes a variety of forms, but one particular recurring variation involves the question whether or not the policyholder has satisfied the policy’s notice requirements when a claim is made against the policyholder during the policy period of one policy but the policyholder does not provide notice until the policy period of a subsequent renewal policy. That was the issue in a case recently decided by the Sixth Circuit Court of Appeals, in which the appellate court affirmed the district court’s holding that the policyholder’s provision of notice during the renewal policy of a claim made during a prior policy period did not satisfy the applicable notice requirements. Because this is a recurring claims issue, I have some thoughts and suggestions about this situation, below. The Sixth Circuit’s May 31, 2019 opinion in the case can be found here.
Continue Reading D&O Insurance: Continuity of Coverage as a Counter to Late Notice
When most people think of liability insurance, they think about the insurer’s payment obligations. But policyholders have obligations under liability insurance policies, too. Among the most important policyholder obligation is the requirement to provide timely notice of claim. The failure to provide timely notice can entirely preclude coverage, as is illustrated in a ruling in a recent coverage dispute arising out of an underlying False Claims Act claim. As discussed below, there were a number of circumstances involved in the underlying claim that the policyholder argued excused or at least explained its late provision of notice. However, the court rejected these arguments and held the late notice was not excused and that coverage was precluded. The February 12, 2019 order in the case by Central District of California Judge Stephen V. Wilson can be found here.
Continue Reading Late Notice Precludes Coverage for False Claims Act Settlement
Claims made policies provide coverage for claims first made during the policy period, but only if the insurer is provided with timely notice of claim. Most claims made policies allow policyholders to provide insurers with a notice of circumstances that may give rise to a claim in the future, in order to make the date of the notice of circumstances as the claims made date for any future claims. A recent Sixth Circuit considered a situation in which a policyholder attempted to provide notice of circumstances, even though, the court later concluded, a claim had already been made. The appellate court concluded that because the policyholder’s notice omitted the circumstance the court considered to represent a claim, the attempted notice was insufficient to provide notice of the actual claim. The court’s decisions raises questions about policyholder’s notice obligations under the policy. The Sixth Circuit’s July 10, 2018 decision can be found here.
Continue Reading Sixth Circuit: Attempted Notice of Potential Claim Insufficient to Provide Notice of Actual Claim