The U.S. Fourth Circuit Court of Appeals recently held that an insured’s telephone notification of a previous insurer that she had received a letter requesting medical records related to a patient did not trigger her current professional liability policy exclusion for damages arising out of a medical incident reported to another insurer prior to the policy inception date. First Professionals Ins. Co. v. Sutton, 2015 WL 3541370 (4th Cir. June 8, 2015).
In 2008, the insured, a physician, received notice from her employing hospital that it had received a request for medical records pertaining to the underlying claimant’s minor son’s injuries. The physician promptly notified by telephone her then professional liability insurer. In 2011, she received a notice of intent to sue from the claimant’s counsel and she referred the notice to her then insurer. The insurer sought a declaratory judgment that there was no duty to defend or indemnify because the incident in question had been reported to a prior insurer and as a result coverage was excluded. The insured counterclaimed seeking coverage.
The insurer argued that it had no duty to defend or indemnify because of an exclusion for injury or damages “arising out of a medical incident” which was previously “reported to an insurer.” The district court agreed, holding that the call to the prior insurer reporting the records request constituted a prior report of a medical incident and held that coverage was excluded. The Fourth Circuit disagreed and remanded. It held that the telephone call did not constitute a report of a medical incident because it failed to report specific “acts, errors, or omissions” and instead merely reported that the claimant’s son was a patient and had received services from the physician.