In this case, the insured attorney sought coverage under his lawyers’ professional liability policy for a malpractice claim. The insurer denied coverage, however, on grounds that the insured failed to notify it of the claim during the policy period or 60-day extended reporting period as required under its claims-made and reported policy. The insured’s former client subsequently commenced suit against the insured and its insurer seeking in part to invalidate the insurer’s disclaimer of coverage on grounds that although the insured failed to provide timely notice of the claim, pursuant to Insurance Law § 3420(a)(3)-(4) the claimants’ notice to the insurer satisfied the policy’s notice requirement, even though such notice was provided after the termination of the policy period and the extended reporting period. The insurer argued that the claimants’ notice did not constitute notice under the police because a lawyers’ professional liability policy is not a “policy or contract insuring against liability for injury to person,” and thus, Insurance Law § 3420(a)(3)-(4) does not apply to save coverage.
The court disagreed with the insurer’s argument, however, and granted summary judgment in favor of claimants, invalidating the insurer’s disclaimer of coverage to its insured. In that regard, the court explained that “the issue under the statute is not whether there was or is excluded from the malpractice coverage any claims arising out of ‘bodily injury,’ but rather whether the policy as a whole is one insuring against liability for ‘injury to person’ (Insurance Law § 3420 [a]).” The court found that “[t]he instant policy does in fact cover claims of ‘personal injury,’ notwithstanding its exclusion for claims of ‘bodily injury’…the basic coverage of the policy extends to claims for damages arising out ‘of an error, omission, negligent act or personal injury’, in the rendering of or the failure to render legal services’ for others by the insured.’” The policy included a definition of the term “personal injury” as including injuries arising out of “false arrest or imprisonment, malicious prosecution, wrongful eviction, defamation, or oral or written publication of material that violates someone’s right of privacy,” and thus “significantly tracks the statutory definition of ‘personal injury’ set forth in General Construction Law § 37-a.” Thus, the court held that there is “no basis for concluding that the concept of ‘injury to person’ set forth in Insurance Law § 3420 (a) does not overlap: a) the concept of ‘personal injury’ set forth in General Construction Law § 37-a and b) the concept of ‘personal injury’ set forth in the coverage provision of the [insurer’s] policy. In that regard, it is simply untenable for [the insurer] to contend that the policy in this case is not one ‘insuring against liability for injury to person’ within the meaning of section 3420 (a).” Accordingly, having found that Insurance Law § 3420 (a) applies to malpractice policies, and based on this reasoning, the court found that claimants’ notice was timely and proper even though it was provided after the policy period because it was not reasonably possible for them to provide notice earlier and that claimants provided such notice as soon as reasonably possible after learning the identity of their former attorney’s insurer.