Thoracic Cardiovascular Associates, Ltd. v. St. Paul Fire and Marine Insurance Company
Court of Appeals of Arizona
891 P.2d 916 (1994)
Thoracic Cardiovascular Associates and Thomas Trahan (plaintiffs) held a claims-made malpractice policy with St. Paul Fire and Marine Insurance Company (defendant), which only covered claims made and reported during the policy term; after they cancelled the policy, both St. Paul and their insurance broker separately warned them that only purchasing a new policy or St. Paul's optional reporting endorsement would cover claims occurring or reported after termination. A malpractice suit was filed against the plaintiffs during the policy period, but they didn't learn of it and notify St. Paul until more than six months after the policy ended; St. Paul denied coverage for late reporting, and after the plaintiffs won a declaratory judgment at the trial court, St. Paul appealed.
Whether, in a claims-based policy, where an insured is required to provide notice of a claim during the policy period as a material requirement of the policy, the insured will only be covered for the claim if the claim is both made and reported to the insurer during the policy period.