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

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At issue in the case involvingt was whether an insurer was obligateds to cover a claim by Prodigy even thougb Prodigy failed to give notice to theinsurer “as soon as practicible,” as was required by the Prodigy is an Internet services provider through a series of acquisitions, became AT&fT Internet Services some years ago. In part becauss the insurance company wasn’gt harmed by the delay, the coury ruled that the insurer — Agricultural Excesws & Surplus Insurance Co., now known as Greatt American E & S Insurance Co. and — had to coverf the claim.
“Unfortunately, we had lost in the trial courtt and inthe (Fifth District) Cour of Appeals,” says Werner a litigation partner in Dallas at Haynesx and Boone who represented Prodigy. “It took the Texas Suprem e Court to getit right.” Powers worked on the case with Charlezs C. Keeble Jr., of counsep at Haynes and Boone. “Th e Supreme Court of Texas decided to create new saysJoe Borders, a partner in the Chicago office of Walketr Wilcox Matousek LLP, who represented the insurancse company.
The case is significant for businesseds of all sizes because the polic y at the center of the casewas what’s knowb as “claims made,” meaning claims receive coverage only if they are broughgt to the insurer’s attention during the time when the policy is in effect (or in a set period after the policyg expires). Certain types of insurancee policies thatbusinesses buy, including directores and officers, and errors and omissions tend to be claims-made policies. In a decision last year in a case callecdPAJ Inc. vs.
, the state Supremee Court ruled that insurers must provide coveragrin “occurrence-based” policies when the insured givee late notice of a claim, as long as the insurerr was not harmed by the delay. Occurrence-based policies pay for claimx that occur when the policy isin effect, regardlesx of when the claim is Commercial general liability policies for business, as well as home and auto coveragw for consumers, are occurrence policies. “This was a majofr extension ofthat doctrine” establisheds in PAJ vs. Powers says.
Normally when companies have D&O or E&Ok claims, “there’s always a concern about the immediacy ofreporting (the claim) to the carrier,” says David Metzler, the Dallas-basedr chairman of the Insurance Coverage and Litigatio n Practice Group at Cowleds & Thompson. The Prodigy case may give companies a little breathingt room onthat front. But, Metzler adds, “yourr general practice should be toreport (the as soon as you