The United States Court of Appeals for the Tenth Circuit, applying Texas law in an unpublished opinion, has held that no coverage existed under a claims-made-and-reported E&O policy where the claim was not reported to the insurer prior to the end of the policy term. Star Ins. Co. v. Berry Ins. Agency, 2007 WL 3226533 (10th Cir. Oct. 31, 2007).
In this action, a complaint was filed against the policyholder during the policy period, but no notice was given to the insurer until several days after the policy period expired. In seeking to garnish the policy, the underlying claimant argued that coverage existed because the notice occurred during the policy's 90-day extended reporting period. The extended reporting provision stated: "This automatic extension will cover claims made against you during this 90-day period arising from wrongful acts that took place subsequent to the Retroactive Date and before the end of the policy period." The court rejected the argument that this clause was ambiguous and affirmed the district court's conclusion that the extended reporting provision applied solely to claims made during the 90-day period.
The court also rejected the argument that an amended complaint filed against the policyholder constituted a separate claim made within the 90-day period. The plaintiffs in the underlying action had moved for leave to file the amended complaint within the policy period, but the amended complaint was not filed until later, during the 90-day extended reported period. The court stated that the amended complaint satisfied the policy's definition of "Claim"—a "written demand . . . for money" received by the insured during the policy period—regardless of whether it was formally filed at the time it was provided to the insured. Accordingly, it constituted a claim first made during the policy period, and the insured's failure to report it to the insurer before the policy's expiration barred coverage.