When something goes wrong at a care facility, families often assume that any insurance the facility carried will be there to help. But insurance coverage does not turn only on when an injury happened. It can turn on the specific type of policy and on when a formal demand for money was made.
Some liability policies are “claims-made” policies. These focus on when a claim is reported to the insurer, not just on when the underlying accident occurred. That distinction can decide whether a policy responds at all.
These technical differences matter to patients, families, and small businesses because a phone call reporting an accident is not always the same thing as a covered “claim.” The words in the policy control.
That was the issue in National Assisted Living Risk Retention Group v. Bishop, a recent decision from Florida’s First District Court of Appeal.
Key Takeaway
Under a claims-made insurance policy, coverage depends on a demand for damages being reported to the insurer during the policy period — not simply on notifying the insurer that an accident occurred.
The question is more specific:
- Was the policy claims-made or occurrence-based?
- Did a “claim” — a demand for money — get made while the policy was in effect?
- Does reporting an accident, or a government agency asking about insurance, count as a “claim”?
What happened in this case?
An 87-year-old man had been placed in an assisted living facility after being declared a vulnerable adult in need of protective services. In July 2012, he wandered away from the facility, tried to cross a busy intersection, and was struck and killed by a truck. Investigators found the driver was not at fault.
After his death, state agencies opened investigations and confirmed that the facility carried the insurance required by law. The facility’s manager called the insurance agent to report the death and the investigations. At that point, no one had said they intended to sue or seek compensation.
Two years later, in 2014, the man’s estate filed a wrongful death lawsuit and ultimately obtained a $20 million judgment. The estate then pursued the facility’s insurer, arguing the insurer should have provided coverage and a defense under the policy that was in effect when the death occurred.
What was the legal dispute about?
The insurer argued that the policy in effect in 2012 was a claims-made policy, and that no “claim” was ever made under it during its coverage period. The estate’s rights in the case were tied only to that 2012 policy.
The trial court had sided with the estate, finding that the manager’s 2012 phone call to the insurance agent amounted to a claim, and that a government agency’s request for proof of insurance also counted as a claim made on the injured person’s behalf. The appellate court disagreed.
Occurrence vs. claims-made coverage
An occurrence policy responds if the negligent act happens during the policy period, regardless of when the claim is later made. A claims-made policy responds only to claims actually made during the policy period arising out of covered incidents. The policy here stated in bold print that it was a claims-made policy.
What did the court decide?
The court held that the policy was, by its plain terms, a claims-made policy. Under the policy’s own definitions, a “claim” was a demand for monetary damages or services because of an injury — not simply the fact that an injury occurred.
The court drew a careful line between two different things: notice that an accident or injury happened, and a claim demanding money arising from that accident. The manager’s phone call reporting the death was notice of an occurrence that might later lead to a claim, but it was not itself a claim under the policy.
The court also rejected the idea that government agencies asking whether the facility had required insurance amounted to a claim, because those inquiries were not made on behalf of the deceased or his estate.
Why did timing matter so much?
Because the policy was claims-made, the key question was whether a claim was reported to the insurer while the policy was in effect. No lawsuit or demand for damages was made on the estate’s behalf until 2014.
The 2012 policy was set to expire in early 2013. So even setting aside a dispute over whether the policy had been properly cancelled for nonpayment, the 2014 wrongful death claim fell outside the period the 2012 policy covered.
The opinion also explained that so-called “tail” coverage — supplemental extended discovery coverage — could have extended the time to report claims for the 2012 incident, but the facility never purchased it and did not timely renew its coverage, creating a gap.
Why does this matter to families and small businesses?
This decision illustrates how much the structure of an insurance policy can shape whether coverage is available. With a claims-made policy, the label at the top of the policy and the definition of “claim” inside it carry real weight.
It also shows that an estate pursuing an insurer generally steps into the shoes of the insured, meaning it inherits the same rights and the same limitations the insured had. The appellate court reversed the judgment that had been entered in the estate’s favor.
Disclaimer: This post is for general information only, is not legal advice, does not create an attorney-client relationship, and does not predict or guarantee any result. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before deciding, ask for free written information about the lawyer’s qualifications and experience.