Notice-of-Circumstances Provisions in Claims-Made Policies
Considerations for D&O Insurers of Subprime Liabilities
The Insurance Coverage Law Bulletin
7/2008
Victor F. Mustelier
As insurers under D&O policies respond to the claims activity likely to be generated by the subprime mortgage crisis, they should consider whether their policyholders are complying with notice provisions commonly found in "claims-made" policies dealing with notice of potential claims and the submission of claims outside of the current policy period. This easily overlooked issue has potentially serious consequences for an insurer affecting the scope of its coverage obligations and the exposure of its limits. In coverage litigation, courts have often found that policyholders who fail to comply with these "notice-of-circumstances" clauses are not entitled to coverage.
In this article, published in July 2008 in The Insurance Coverage Law Bulletin (an ALM Law Journal Newsletter), Mintz Levin attorney Victor F. Mustelier discusses relevant case law and background to demonstrate the strong need for insurers to insist on strict compliance by policy holders with notice-of-circumstances provisions in claims-made policies.
