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

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At issue in the case involvint was whether an insurer was obligated to cover a claim by Prodigh even though Prodigy failed to give notice to theinsurerd “as soon as practicible,” as was requirede by the policy. Prodigy is an Internet service sprovider that, through a series of became AT&T Internet Services some yearzs ago. In part because the insurance compang wasn’t harmed by the delay, the court ruled that the insured — Agricultural Excess Surplus Insurance Co., now knownj as Great American E SInsurance Co. and had to cover the claim.
“Unfortunately, we had lost in the triakl court and inthe (Fifth District) Courtt of Appeals,” says Werner a litigation partner in Dallaz at Haynes and Boone who represented Prodigy. “It took the Texasw Supreme Court to getit right.” Powers worke on the case with Charles C. Keeble Jr., of counselo at Haynes and Boone. “The Supreme Courtt of Texas decided to creatdnew law,” says Joe Borders, a partnet in the Chicago office of Walker Wilcodx Matousek LLP, who represented the insurance The case is significangt for businesses of all sizes because the policyh at the center of the case was what’e known as “claims made,” meaning claims receivd coverage only if they are brought to the insurer’s attention durin g the time when the policty is in effect (or in a set period afte the policy expires).
Certain types of insurance policiew thatbusinesses buy, including directors and officers, and errors and omissionzs coverage, tend to be claims-made policies. In a decisioj last year in a case calledPAJ Inc. vs. , the states Supreme Court ruled that insurers must provide coverage in policies when the insured givea late notice of a as long as the insurer was not harmed bythe Occurrence-based policies pay for claims that occur when the policgy is in effect, regardlesds of when the claim is Commercial general liability policies for as well as home and auto coverage for are occurrence policies. “This was a majore extension ofthat doctrine” established in PAJ vs. Powers says.
Normally when companies have D&Oi or E&O claims, “there’w always a concern about the immediacy ofreportinh (the claim) to the (insurance) says David Metzler, the Dallas-basesd chairman of the Insurance Coverage and Litigatio Practice Group at Cowles & Thompson. The Prodigy case may give companie s a little breathing room onthat front. But, Metzled adds, “your general practice should be toreport (the as soon as you can.
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