We’ve talked about it many, many, times before. E&O Policies are “claims made and reported” policies. That means you have to report the claim within the policy period, or you lose coverage. Sometimes, you have even stricter deadlines. Like the one RE/Max Mega Group had. It required reporting within 30 days of receipt of a notice of claim. RE/Max Mega Group waited longer than that. It waited two months. 60 measley days.
The CA court of appeal ruled last week: No coverage on the claim. Period.
RE/Max Mega Group tried to assert a claim that the insurance carrier, Maxum Indemnity had denied the claim in bad faith. Nope, said the court.
When you get those letters, emails, postcards, carrier pigeon messages from an unhappy client (in this case, RE/Max even got a copy of the complaint!) — Don’t Wait. Report the claim. Even if it’s just a “potential claim.”