University’s Late-Noticed Claim Not Covered Under Claims-Made-And-Reported Policy; Notoriety of Claim Not an Excuse

The United States District Court for the District of Massachusetts, applying Massachusetts law, has held that a university’s late-noticed claim was not covered under a claims-made-and-reported insurance policy. President & Fellows of Harvard Coll. v. Zurich Am. Ins. Co., 2022 WL 16639238 (D. Mass. Nov. 2, 2022). The court found that the insurer did not need to show it was prejudiced by the late notice and that it was irrelevant whether the insurer may have had actual or constructive notice of the claim during the reporting period.

The insured university had an excess claims-made-and-reported insurance policy for the Policy Period of November 1, 2014 to November 1, 2015. The policy provided that all claims must be reported in writing to the insurer no later than 90 days after the end of the Policy Period (i.e., January 30, 2016). During the Policy Period, the university was named in a lawsuit alleging that its admissions policy discriminated against Asian American students. The suit was not reported to the insurer until May 23, 2017. The insurer denied coverage, and litigation followed.

The court granted the insurer’s motion for summary judgment, finding that the policy’s notice requirement was a condition precedent to coverage and that the university undisputedly reported the lawsuit late. The court found that the insurer did not need to show that it was prejudiced in order to deny coverage based on late notice because, under Massachusetts law, the notice requirements in a claims-made-and-reported policy are strictly enforced. The insured argued that the underlying lawsuit was widely publicized, but the court held that the result would be the same even if the insurer had actual or constructive knowledge of the underlying lawsuit during the reporting period. The court concluded that the notice provisions in claims-made-and-reported policies leave no “wiggle room” to excuse an insured’s noncompliance.