Firm obtains $1M insurance coverage arbitration win

BOSTON (Aug. 24, 2011) – The firm  recently obtained a significant victory for a large commercial insurer by persuading an arbitration panel to reject a claim for $1 million in insurance coverage.

The panel found that the policyholder, an architectural and design firm, had knowledge of a potential legal claim against it prior to purchasing the $1 million “claims made and reported” policy from Barton Gilman’s insurer client in November 2004. The one-year policy only covered claims first made and reported during the policy period, and barred coverage if, prior to the inception of the policy, the policyholder had knowledge of a claim or circumstances likely to give rise to a claim prior to the inception of the policy.

In 2003, the owner of an Arizona casino and resort filed a lawsuit against a general contractor alleging design and construction deficiencies related to the construction of the facility. The general contractor’s attorney, in turn, sent a letter to the architectural firm in July 2004 (one month before the firm submitted its application for claims-made policy) notifying it of the pending lawsuit, seeking defense and indemnification, indicating the architectural firm bore liability for its work related to the casino project, and suggesting that the firm place its insurance carrier on notice of the “claim.”

The architectural firm did not provide its insurer with notice of the claim until November 2005. In the arbitration, the insured claimed that it did not believe, in 2004, that the letter it had received was a “claim” or that a claim was likely. Firm attorneys argued that the letter constituted “knowledge of circumstances likely to give rise to a claim,” if not an actual “claim” under the policy and under Colorado law.

The arbitration panel, in granting summary judgment to Barton Gilman’s client precluding coverage, held that the July 2004 letter was a “claim” within the meaning of the policy, and that it provided the policyholder with sufficient knowledge of circumstances likely to lead to a claim.

About Barton Gilman

Barton Gilman is one of New England’s leading civil litigation law firms with offices in Boston and Providence. The firm regularly handles insurance coverage matters. Its experienced trial attorneys appear regularly in the federal and state courts of Massachusetts, Rhode Island and Connecticut. The Providence Business News has named the firm four consecutive years as one of Rhode Island’s Best Places to Work (2008–2011).