No Coverage Under Claims-Made Policy for Lawsuit Served on Registered Agent Before Policy Period

In a win for Wiley’s client, the United States District Court for the Southern District of Florida, applying Florida and District of Columbia law, has found that a claims-made professional liability policy does not afford coverage for a lawsuit served on the insured’s registered agent prior to the policy period, even though the insured asserted that it did not have actual knowledge of the lawsuit until after the policy incepted. DC Cap. Law Firm, LLP v. Hanover Ins. Co., 2022 WL 18402566 (S.D. Fla. Nov. 15, 2022). The court found that the Claim was considered first made within the meaning of the policy when the lawsuit was served, and the “essence of a claims-made policy” is not to cover any claim made prior to the inception of the policy period.

The insured law firm purchased a claims-made lawyers professional liability policy with a policy period of December 21, 2018 to December 21, 2019. The policy defined “Claim,” in relevant part, as a “[c]ivil proceeding commenced by the service of a complaint or similar pleading.” A timeshare company sued the insured law firm alleging false advertising and served the complaint on the law firm’s registered agent on December 19, 2018. The insured sought coverage for the lawsuit under the policy. The insurer denied coverage on the basis that the lawsuit was a claim first made prior to the claims-made policy period. The law firm disputed the insurer’s position and filed coverage litigation. The insurer filed a counterclaim in the coverage litigation and moved for judgment on the pleadings.

The court granted the insurer’s motion. The court held that the lawsuit was a claim first made when the law firm’s registered agent was served, which was prior to the policy period. The court found it irrelevant whether the insured had actual knowledge of the lawsuit because the policy expressly defined “Claim” to include service of a lawsuit.