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A New York federal district court ruled that an insurer had no duty to provide coverage under a claims-made policy because the insured’s notice of claim was deficient.  Univ. of Pittsburgh v. Lexington Ins. Co., 2016 WL 4991622 (S.D.N.Y. Sept. 16, 2016).

Lexington issued a claims-made policy to the University of Pittsburgh for the period February 1, 2011 to February 1, 2012.  On the last day of the coverage period, the insured filed a notice of claim.  The notice listed the location of the occurrence as the University of Pittsburgh’s Salk Hall and stated that “[s]enior management has been advised by the University of Pittsburgh that this project is experiencing problems and delays in its early stages.”  Opinion & Order, Univ. of Pittsburgh v. Lexington Ins. Co., No. 13-cv-335 (S.D.N.Y. July 21, 2016).  Lexington argued that the notice was insufficient and that there was no coverage because the policy required adequate notice as a precondition to coverage.  The court agreed and granted Lexington’s summary judgment motion.

Applying Pennsylvania law, the court held that notice to Lexington was “plainly insufficient to meet the conditions precedent to coverage.”  In particular, the notice failed to articulate any actual or alleged breach of a professional duty or injury or damage that might result in a claim, as required by the policy.  In so ruling, the court noted that notice provisions under claims-made policies should be strictly applied, notwithstanding “harsh consequence[s].”  The court rejected the insured’s argument that the failure to comply with the policy’s notice provisions should be excused because it substantially complied with its terms.  The court explained that if such reasoning were credited, “any purchaser of a claims-made policy could effectively transform it into a broader (and typically more expensive) occurrence policy by asserting nebulous ‘claims,’ with specificity to be filled in only later . . . .”