Coverage Question Series – Part 46
Post on March 15th, 2019
This is a continuing series in which we address policy coverage questions that we routinely discuss with you and your colleagues. The answers provided are based on the basic policy form, currently LPLP-1s (effective for all policies new or renewed as of May 1, 2018). Refer to your specific policy and any endorsements attached thereto that may change coverage or the answers provided here.
I forgot to mention, I was served with a complaint a few months ago and now there is a default judgment against me, am I covered?
No. You have a busy practice. You fully intended to send the complaint to OBLIC, just as soon as you put together a cover letter. It really has only been sitting on the corner of your desk for a few weeks. Now that you think about it, it was waiting for you when you got back from vacation over the holidays. Unfortunately it is already mid-March.
“If a “Claim” is made or suit is brought against the Insured, the Insured shall immediately forward to the Company every demand, notice, summons or other process received by the Insured or the Insured’s representative.” VI. NOTICE OF CLAIM OR SUIT, OR POTENTIAL CLAIMS, LPLP-1s (05-2018), p. 11. Complying with the requirement to immediately forward the summons and complaint in Condition VI of the policy is a condition precedent to coverage. See I. Coverage, p. 1. Failure to do so will leave you solely responsible for the default judgment and any damages arising therefrom. As soon as you receive ANY notice of a claim or suit, or even a hunch or rumor of such, immediately report it!
As you should expect, these Q&A scenarios are based on simple hypotheticals. Coverage determinations for an actual claim are ultimately based on the unique facts, applicable law, and the Terms, Conditions, Limitations, Exclusions, and Endorsements of your policy.
Carl Marsh, Esq.