It is important to know when to put your Attorney Malpractice Insurance Carrier on notice. Most malpractice policies require the insured to put the malpractice insurance carrier on notice when the insured has ‘reasonable knowledge or can reasonably expect’ that a malpractice claim may be filed against the insured. Malpractice policies also have language in them specifically excluding coverage for any claim that an insured had ‘prior knowledge’.
Malpractice policies generally require that the notice of claim be sent to them ASAP usually within 30 days and almost always prior to renewal on insurance coverage. Many renewal applications specifically ask whether the insured has a ‘reasonable expectation’ that a malpractice claim may be made against them. And if changing insurance carriers, the new business applications always ask about pending claims.
In Gonakis v Medmarc Casualty Insurance Company just such an issue arose. Attorney Ganokis received a letter from Attorney Thomas representing a prior client that Attorney Ganokis should put his insurance carrier on notice. Attorney Ganokis determine that the letter he received was not sufficient to justify putting his current carrier, Professional Solutions Insurance Company (PSIC) on notice. Attorney Ganokis at the renewal of his coverage decided to switch insurance carriers from PSIC to Medmarc. When he did he also signed a new business Medmarc application that stated that he was not aware of any pending actions against him.
Medmarc Casualty upon getting notice of the claim denied coverage and refused to provide a defense for Attorney Ganokis citing ‘prior knowledge’ of a pending matter. Attorney Ganokis then filed a declaratory action against Medmarc attempting to have the court determine that they was coverage. The US District Court granted Medmarc’s motion for Summary Judgement that there was no coverage and denied Attorney Ganokis motion to force Medmarc to provide a defense and provide coverage.