Among the perennial coverage issues arising under D&O and E&O policies are questions involving timely notice of claim. Recently, the notice provisions many professional liability insurance policies relating to notice timeliness have been revised to lengthen the time period within which notice must be given and even specifying that if in order to assert late notice of claim, an insurer must demonstrate that it has been prejudiced by the late provision of notice. In the following guest post, industry veteran and well-known insurer-side coverage attorney Joseph P. Monteleone of the Rivkin Radler law firm takes a look at these policy wording changes as well as the case law context within which these changes have arisen.
I would like to thank Joe for his willingness to publish his article on this blog. I welcome guest post submissions from responsible authors on topics of interest to readers of this site. Please contact me directly if you are interested in submitting a guest blog post. Here is Joe’s guest post.
One of the hallmarks of a claims-made and reported policy historically has been the two-pronged requirement that (1) the claim against the insured must be first made during the policy period, and (2) the claim had to be reported to the insurer, if not strictly within the policy period, at least no later than a “bright line” cut-off date after policy expiration. These cut-off dates were generally thirty (30) or sixty (60) after policy expiration.
Contrast these with so-called pure claims-made policies, which have the first of the two-pronged component discussed above, but the reporting requirement is typically “as soon as practicable”[i], similar to reporting requirements under occurrence-triggered policies such as the Commercial General Liability (CGL) policy.
As part of the inexorable trend of policy wordings becoming ever broader for the benefit of the policyholder, notwithstanding any hardening or softening of rates for the policies, we have seen significant modifications to the policy reporting provisions.