The court found that the insurer properly denied a claim made under the claims-made policy during the second policy period when the incident occurred during the first policy period. Alaska Interstate Constr. v. Crum & Forster Specialty Ins. Co., 2017 U.S. App. LEXIS 15997 (9th Cir. Aug. 22, 2017).
Crum & Forster (C&F) issued an initial policy to Alaska Interstate Construction (AIC) with a policy period from December 1, 2011 to May 1, 2013, and then a renewal policy with a policy period of May 1, 2013 to May 1, 2014. Both were "claims-made" policies, limiting coverage to claims made and reported during the "policy period," which was defined as "the period shown in the Declarations."
A claim was made against AIC by VC Sellers Reserve, LLC on January 10, 2013, during the initial policy period. AIC, however, did not report the claim until June 19, 2013, during the second policy period. The district court held that C&F was entitled to summary judgment because the claim was not made against AIC and reported to C&F during the same policy period as required by the policies.
According to the plain language of the policies, a claim had to be made and reported within a single policy period. An insured could not reasonably expect coverage when reporting a claim six months into the renewal policy period.
While there was no Alaska law on the subject, the Ninth Circuit predicted that the Alaska courts would follow the majority position and hold that, unless policy language provided otherwise, renewals of claims-made policies generally did not extend claims reporting periods.
The policy provided an automatic 90-day extended reporting period after the cancellation of the initial policy period. AIC argued that if the policies were viewed separately for purposes of determining the "policy period," then a policy must be viewed as effectively canceled when its policy period ended, making the extended reporting period applicable. The plain language of the policy, however, stated that cancellation and non-renewal were the events that triggered the extended reporting period. Because AIC renewed its policy, the extended reporting period did not apply.
