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Brooklyn Journal of Corporate, Financial & Commercial Law

First Page

251

Abstract

Insurance policies contain notification requirements. A typical requirement is that notice be provided of a claim, or of an incident likely to lead to a claim, promptly or within a certain number of days of the occurrence. A claims-made-and-reported policy generally has this type of notification requirement but further requires that notice of a claim be provided within the coverage dates of the policy or within a set number of days following the policy’s expiration date. Over the years, the claims-made-and-reported form has reached popularity in regard to certain types of liability coverage. As exemplified by the case of President and Fellows of Harvard College v. Zurich American Insurance Co., dire consequences may result from a failure to follow notification requirements contained in a claims-made-and-reported policy. Harvard was denied recovery on a $15,000,000 liability policy because notice of claims of discrimination made against the college was provided to the insurer outside the allowed reporting period following termination of the policy. As occurred in the case involving Harvard, the court may not even consider the effect of the insurer having actual knowledge of the claim. Further, even when notice of a claim is provided within the term dates of a claims-made-and-reported policy, some courts will deny coverage if the notice fails to strictly comply with a policy term requiring prompt notice of the occurrence of a claim. Through striking unreasonable notifications provisions based on public policy concerns, courts should take a more active role in relation to notification requirements in claims-made-and-reported policies to protect reasonable expectations of insureds.

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