There are two distinct "Claims Made" policy forms and the difference can determine the
outcome of a potential claim. The two types are: “Claims Made” and “Claims Made and
Reported”. Both forms contain the Wording “Claims Made”. This will be the written
demand for money or services being made. The reporting requirements are generally
spelled out within each policy and may be proprietary to that insurer. Since most
professional liability policies are 'claims made', and will generally state on the
declarations page, that this is a “Claims Made” form, it is extremely important to
understand the claims reporting provisions contained within that particular policy.
The “pure Claims Made” form requires that the ‘claim’ must occur and be made during
the policy term and be reported as soon as practicable, or promptly (and not necessarily
during the policy term). (note the importance here of the Word ‘made’ during the policy
term). The “Claims Made and Reported” form has the requirement that the claim must
BOTH occur during the policy term and be reported during the same policy term. A
single day can mean coverage or no coverage. The professional liability insurance
purchaser must make certain these two policy forms are understood. A recent Montana
case made this point very clear when coverage was denied. (Gotham Ins. Co. v
Allegiance Benefit Management, US Dist. Court, Dist. Of Mt. Missoula Div. case 9:11-
Both policies will also stipulate claims reporting instructions. Seldom is the case where
an insured and insurer dispute the proper address to which notice of a claim should be
sent. However, this is exactly what occurred in the 3rd Circuit Court of Appeals, Atlantic
Health System v National Union Fire Ins. 2012 WL 640033 (3rd Cir. 2/29/2012). The
court held that the notice of an underlying lawsuit submitted by Atlantic Health to
National Union Fire was improper because it was sent to the wrong National Union
address. The court stated that “strict adherence to the reporting provisions in a claims-
made policy is essential and the policy clearly required written notice to a specińc
address within a specified period of time.”
The above is certainly a strong reminder that when it comes to proper notice, insured’s
should be cognizant, not just about the timeliness of transmittal, but of the channel
through which the claim is submitted.
Darnielle Insurance is available to answer your questions.
We are located at 1320 28th Street West, Billings, MT 59102.
Give us a call at 406-652-4180.
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