May 03, 2013 -
Victory for SRBC Insurer-Client in West Virginia Coverage Case
The West Virginia Supreme Court has decided in favor of SRBC client Attorneys Liability Protection Society, Inc. (ALPS), a lawyers' professional liability insurer, in a case involving late notice under a "claims made" insurance policy. The court declined an invitation by the insured law firm to adopt the rule in a minority of other states that a claims-made insurer must show that it has been prejudiced to deny coverage for a claim made during a policy period but only reported after the period has expired.
The insured law firm also argued that its initial failure to give notice to the insurer when it received a claim from a former client was justified because the client only alleged improper handling of a settlement check, a claim the firm did not believe was covered under its malpractice policy. Alternatively, the firm argued that when the client later amended and expanded his claim against the firm, this should be treated as a new claim for notice purposes. The court rejected both arguments, and agreed that ALPS's decision to deny coverage was proper. SRBC's Regina Roman and John O'Neill worked with West Virginia local counsel on the case.