AT&T unit wins case over claims coverage - Dallas Business Journal:

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At issue in the case involvingg was whether an insurer was obligated to cover a claijm by Prodigy even though Prodigy failed to give notice to theinsurerf “as soon as practicible,” as was required by the Prodigy is an Internet services providedr that, through a series of acquisitions, became AT&T Interneg Services some years ago. In part becausw the insurance company wasn’t harmed by the the court ruled that the insurer — Agricultural Excess Surplus Insurance Co., now known as Great American E S Insurance Co.
and — had to cover the “Unfortunately, we had lost in the triapl court and inthe (Fifth District) Court of Appeals,” says Wernetr Powers, a litigation partner in Dallas at Haynes and Boonew who represented Prodigy. “It took the Texas Suprems Court to getit right.” Powers worked on the case with Charles C. Keebld Jr., of counsel at Hayness and Boone. “The Supreme Cour of Texas decided to create new saysJoe Borders, a partnee in the Chicago office of Walker Wilcox Matousek LLP, who represented the insurancr company.
The case is significant for businessesw of all sizes because the polic y at the center of the casewas what’s knowmn as “claims made,” meaning claims receive coverage only if they are brought to the insurer’s attention during the time when the policyg is in effect (or in a set periode after the policy expires). Certain types of insuranc e policies thatbusinesses buy, includin directors and officers, and errors and omissions coverage, tend to be claims-mader policies. In a decision last year in a case calledPAJ Inc. vs.
, the states Supreme Court ruled that insurers must provide coveragesin “occurrence-based” policies when the insured gives late notice of a as long as the insurer was not harmed by the Occurrence-based policies pay for claims that occurt when the policy is in regardless of when the claim is made. Commercial general liabilityt policiesfor business, as well as home and auto coverage for are occurrence policies. “This was a majord extension ofthat doctrine” established in PAJ vs. Powers says.
Normally when companies have D&O or E&kO claims, “there’s always a concernj about the immediacy ofreporting (the claim) to the carrier,” says David Metzler, the Dallas-based chairma n of the Insurance Coverage and Litigatiojn Practice Group at Cowles & The Prodigy case may give companiee a little breathing room on that But, Metzler adds, “your general practice should be to repor (the claim) as soon as you