James is director of research for a pharmaceutical company. The company recently

Question

James is director of research for a pharmaceutical company. The company recently introduced a new drug to reduce the symptoms of arthritis. The company is insured under a claims-made CGL policy. The policy term is January 1, 2012 through December 31, 2012. On December 15, 2012, a patient of a physician that prescribed the drug became seriously ill after taking the prescribed dosage. On February 1, 2013, the patient filed a claim against the company for the illness. The company was given notice that the patient had become ill on December 23, 2012.

1. Explain whether the company's claims-made policy will cover the loss.

2. What is the time constraint for the injured party to file a claim and have it covered by the claims-made policy in this situation?

Explanation / Answer

There are statutes of limitations that prescribed the time limit within which the aggreived party can file a legal suit for claim similiar to what is given in the question. Normally, in most of the such insurance policy claim cases, the limit may be upto 30 days and or mentioned in the policy document.

There is a difference between 'Occurrence" and "claims-made CGL insurance policy. In the case of occurrence it is important that the injury happened durion the period of the insurance and claim can be made even after months asnd may be even after a year. On the other hand claims-made CGL have bad reputation with respect to accepting the claims after months even though the claim is pertaining to injury/suffering happened during the insurance period.

2. Claims-made CGL ( commercial general liability) policies normally allows /permit and or only provide a 90-day extended reporting period beyond the expiration of the policy during which claims that occurred during the policy period can be reported.

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.