Do you think either of these companies is responsible for payment of the loss?

Pennsylvania Subscriber

A

It is impossible to definitively answer this question without an extensive review of both policy forms. Most claims-made policies specifically state when incidents and claims must be reported, and they often differ. However, coverage is doubtful.

Company B does have a retro date that takes in the date of loss (April 1999). But the policy probably excludes incidents and damages the insured was aware of prior to the inception date of the policy. The application, which becomes a part of the policy, listed the 1999 loss. Company B probably is correct in denying any liability.

Company A's form states that claims must be reported within six months of their occurrence. This period of time lapsed in October of 1999. There also may be a provision on Company A's form that states that incidents — regardless of whether an actual claim is being filed — should be reported within a set time frame. Even if the insured did not think a claim for damages would be paid by Company A, he should have reported the incident.

The insured also may have violated the conditions section of the policy by paying the claim himself. Many liability policies contain wording that forbids insureds from making voluntary payments without company authorization.