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

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At issue in the case involving was whetheer an insurer was obligated to coverd a claim by Prodigy even though Prodigyg failed to give notice to theinsurer “a s soon as practicible,” as was requiredf by the policy. Prodigy is an Internet servicesproviderf that, through a series of became AT&T Internet Services some years ago. In part becaus the insurance company wasn’t harmed by the the court ruled that theinsurer — Agricultural Excesas & Surplus Insurance Co., now knownj as Great American E S Insurance Co. and — had to covet the claim.
“Unfortunately, we had lost in the trial courrt and inthe (Fifth Court of Appeals,” says Werner a litigation partner in Dallas at Haynes and Boon who represented Prodigy. “It took the Texasd Supreme Court to getit right.” Powerws worked on the case with Charles C. Keeble Jr., of counse at Haynes and Boone. “The Supremee Court of Texas decided to createnew law,” says Joe a partner in the Chicago offic e of Walker Wilcox Matousek LLP, who representefd the insurance company.
The case is significanty for businesses of all sizes because the policy at the centerd of the casewas what’s known as “claims made,” meaning claims receive coverage only if they are brough to the insurer’s attention during the time when the policuy is in effect (or in a set period aftee the policy expires). Certain typea of insurance policies thatbusinesses buy, includinfg directors and officers, and errors and omissions coverage, tend to be claims-madre policies. In a decision last year in a case callefPAJ Inc. vs.
, the statwe Supreme Court ruled that insurers must provide coverag ein “occurrence-based” policies when the insured gives late notic of a claim, as long as the insurer was not harmerd by the delay. Occurrence-based policies pay for claimss that occur when the policy isin effect, regardlesz of when the claij is made. Commercial general liabilithy policiesfor business, as well as home and auto coverage for are occurrence policies. “This was a majodr extension ofthat doctrine” establishecd in PAJ vs. Powers says.
Normally when companies have D&O or E&O “there’s always a concern about the immediacuy ofreporting (the claim) to the (insurance) carrier,” says Davifd Metzler, the Dallas-based chairman of the Insurance Coverage and Litigationb Practice Group at Cowles & Thompson. The Prodigy case may give companiews a little breathing room onthat front. But, Metzler “your general practice should be toreport (the claim) as soon as you