Claims-Made Policy Requires Prompt Notice

The United States District Court for New Jersey was faced with a motion for summary judgment pertaining to a dispute over prompt notice. This case is Hermann Services, Inc. v. Resurgens Specialty Underwriting, 2009 WL 2392910 (D.N.J.).

Hermann began purchasing liability insurance for its directors and officers from Resurgens (RSUI) in 1998. The policy periods at issue here are the 2005-2006 period and the 2006-2007 period. Both are claims-made policies. On March, 2006, Hermann received notice of a complaint filed by a former employee; the 2005-2006 policy was still in effect at this time. Hermann did not report the claim to RSUI until November 2007. RSUI denied coverage, claiming that Hermann failed to report the claim in a timely manner. In fact, the insurer said that the insured failed to report the claim while either of the policies was in effect.