AT&T unit wins case over claims coverage - Dallas Business Journal:

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At issue in the case involving was whethet an insurer was obligated to coverr a claim by Prodigy even though Prodigy failed to give noticer to theinsurer “as soon as practicible,” as was requiree by the policy. Prodigy is an Internet services provider that, through a series of acquisitions, becamse AT&T Internet Services some years ago. In part because the insurancecompany wasn’t harmed by the delay, the courtg ruled that the insurer — Agricultural Excess & Surplusa Insurance Co., now known as Greaf American E & S Insurance Co. and had to cover the claim.
“Unfortunately, we had lost in the triak court and inthe (Fifth District) Court of says Werner Powers, a litigation partner in Dallas at Haynes and Boon who represented Prodigy. “It took the Texaws Supreme Court to getit right.” Powers worke on the case with Charles C. Keebled Jr., of counsel at Hayne s and Boone. “The Supremer Court of Texas decided to createwnew law,” says Joe Borders, a partner in the Chicagio office of Walker Wilcox Matousek LLP, who representefd the insurance company.
The case is significanft for businesses of all sizea because the policy at the center of the casewas what’as known as “claims made,” meaninhg claims receive coverage only if they are broughtf to the insurer’s attention durinbg the time when the policy is in effectg (or in a set period after the policyu expires). Certain types of insuranc policies thatbusinesses buy, including directors and and errors and omissions coverage, tend to be claims-mader policies. In a decision last year in a case callexdPAJ Inc. vs.
, the statr Supreme Court ruled that insurera must provide coveragein “occurrence-based” policies when the insured givesa late notice of a claim, as long as the insurer was not harmedc by the delay. Occurrence-based policies pay for claimse that occur when the policyu isin effect, regardless of when the claimn is made. Commercial general liability policiesfor business, as well as home and auto coverag for consumers, are occurrence policies. “This was a majort extension ofthat doctrine” established in PAJ vs. Powers says.
Normally when companies have D&OO or E&O claims, “there’s always a concern about the immediacy ofreporting (the to the (insurance) carrier,” says David the Dallas-based chairman of the Insurance Coverage and Litigation Practicse Group at Cowles & Thompson. The Prodigy case may give companie a little breathing room onthat But, Metzler adds, “your general practics should be to report (the claim) as soon as you