Mr. Smith buys two CGL claims-made policies with retroactive dates 1-1-04 and 1-1-05. An accident occurs 7-1-04 and the claimant files this injury 9-1-05. Which policy covers?

Mr. Smith buys two CGL claims-made policies with retroactive dates 1-1-04 and 1-1-05. An accident occurs 7-1-04 and the claimant files this injury 9-1-05. Which policy covers?

• A. 1-1-04 claims-made policy
• B. 1-1-05 claims-made policy
• C. 1-1-04 is primary and 1-1-05 policy is excess
• D. Neither policy covers

Answer: (D)

In a claims-made policy, two things determine coverage: the claim must be made while the policy is in force, and the incident must occur after the policy’s retroactive date. When there are two policies with different retroactive dates, you look for a policy that was active at the time the claim was first made and that has a retroactive date on or before the incident date. Here, the accident happened on 7-1-04, which is after the earlier retroactive date (1-1-04), so that incident would be eligible under that policy in principle. But the claim was filed on 9-1-05, and we don’t know whether the first policy was still in force at that time. If it wasn’t, it wouldn’t provide coverage. The second policy has a later retroactive date (1-1-05). Because the incident occurred before that date, it would not be covered by the second policy, even if that policy were in force when the claim was made. Since we can’t confirm that the first policy was in force on 9-1-05, and the second policy cannot cover the incident date, neither policy ends up providing coverage for this claim.

In a claims-made policy, two things determine coverage: the claim must be made while the policy is in force, and the incident must occur after the policy’s retroactive date. When there are two policies with different retroactive dates, you look for a policy that was active at the time the claim was first made and that has a retroactive date on or before the incident date.

Here, the accident happened on 7-1-04, which is after the earlier retroactive date (1-1-04), so that incident would be eligible under that policy in principle. But the claim was filed on 9-1-05, and we don’t know whether the first policy was still in force at that time. If it wasn’t, it wouldn’t provide coverage. The second policy has a later retroactive date (1-1-05). Because the incident occurred before that date, it would not be covered by the second policy, even if that policy were in force when the claim was made.

Since we can’t confirm that the first policy was in force on 9-1-05, and the second policy cannot cover the incident date, neither policy ends up providing coverage for this claim.