Joyce Tam and Tom Donnelly successfully represented the insurers of an excess “claims made and reported” professional liability policy in Kestenberg Siegal Lipkus LLP v. Royal & Sun Alliance Insurance Co. of Canada, 2023 ONSC 3132.

The insured law firm was sued for negligence and reported the claim to its insurance broker. The broker promptly reported the claim to the primary professional liability insurer, LawPRO, but did not report it under the excess policy until about three years later. The broker entered into an agreement with the law firm which allowed the broker to sue the excess insurers in the law firm’s name.

The broker argued that the excess policy was not a “claims made and reported” policy and that relief from forfeiture ought to be granted. Justice Morgan rejected both arguments. He first held that the excess policy was a “claims made and reported” policy and that there was no coverage because the claim was not reported during the policy period in which it was first made. He also held that relief from forfeiture was unavailable for failure to make a timely report of a claim under this type of policy.

Justice Morgan dismissed the broker’s coverage application with costs payable to the insurers. The decision is currently under appeal.