Liability insurance written on a claims made basis is designed to protect an insured against claims asserted following the policy’s inception even if the acts giving rise to the claim.
[author: Mary Weaver]
The United States District Court for the District of North Dakota has held that an insurer had no duty to defend a claim under a lawyers professional liability policy where the insured had prior knowledge that a claim might be made and should have given notice of the potential claim prior to the policy’s effective date.
The insured attorney defended a construction company in a breach of contract action beginning in 2015. While the attorney maintained that his representation was in a limited capacity, he made several appearances in court and received electronic service of documents on behalf of the client. The client never obtained other counsel. The case proceeded to trial in March of 2017, without the insured attorney present, and judgment was entered against his client. A legal malpractice lawsuit against the insured attorney followed.