In GS2 Engineering & Environmental Consultants, Inc. v. Zurich American Insurance Company, 2013 WL 3457098 (D.S.C. July 9, 2013), the U.S. District Court for the District of South Carolina, Columbia Division, found that renewal of a claims-made-and-reported policy does not modify the policy requirement that claims be reported in the same policy period in which they are received.
GS2 was insured under a series of one-year claims-made-and-reported insurance policies issued by Steadfast Insurance Company. The first policy covered the policy period August 7, 2005 to August 7, 2006. The policy was renewed annually until the last policy period of August 7, 2010 to August 7, 2011. At issue were the policies in effect from August 7, 2009 to August 7, 2010 (“the 2009 policy”) and August 7, 2010 to August 7, 2011 (“the 2010 policy”). The policies required that a claim first be made against GS2 within the “policy period” and reported, in writing, to Steadfast during the “policy period.” GS2 was served with a lawsuit filed by Richland School District on April 14, 2010, but Steadfast did not receive notice of the claim until September 23, 2010. Steadfast denied coverage because GS2 did not both receive and report the claim during the same August 7, 2009 to August 7, 2010 policy period.
In GS2’s ensuing coverage action, the court granted summary judgment for Steadfast. The court found that GS2 waited too long to notify Steadfast of the lawsuit, and it rejected GS2’s argument that all of the Steadfast policies should be treated as a single continuous policy. The court also rejected GS2’s alternative argument that the reporting period for the 2009 policy should be extended into the 2010 policy. Instead, the court held that the policies require both that claims be made against GS2, and reported to Steadfast during the same policy period. Also, the claim came too late to come within the 2009 policy’s extended reporting period.