A hospital medical director was entitled to coverage under his hospital’s directors and officers liability claims-made insurance policy based on the timing of a second amended complaint in the underlying litigation, said a federal appeals court in overturning a lower court’s ruling.

In March 2011, Joel Lind-Hernández and his sister, Nilda Ester Lind-Hernández, filed a lawsuit charging Hospital Episcopal San Lucas Guayama in Ponce, Puerto Rico, with negligence in connection with the amputation of Mr. Lind-Hernandez’s legs, according to Thursday’s ruling by the 1st U.S. Circuit Court of Appeals in Boston in Nilda Esther Lind-Hernández, Joel Lind-Hernández v. Hospital Episcopal San Lucas Guayama et al.; Dr. Gerson Jiménez-Castaner v. Liberty Mutual Insurance Co.

Dr. Jiménez, who was then a medical director at the hospital, was not named as a defendant in either the Hernándezes’ original complaint nor their first amended complaint. In February 2012 he was, however, deposed in the case and then named in a second amended complaint that was filed in April 2012.

Liberty Mutual had issued the hospital a D&O claims-made policy with a policy period that ran from Nov. 30, 2011, through Nov. 30, 2012.

Pointing to the first amended complaint, the insurer denied Dr. Jiménez’s coverage on the policy on the basis the claim was first made before its policy took effect and so was not covered.

Dr. Jiménez filed suit in U.S. District Court in San Juan, Puerto Rico, charging Liberty Mutual had breached his contractual rights in wrongfully denying his claim.

The court granted Liberty Mutual’s summary judgment motion in the case, which was unanimously overturned by a three-judge appeals court panel.

“We agree with Jiménez’s argument that the District Court wrongfully construed the policy in concluding that Liberty did not breach it by denying Jiménez coverage for the ‘Loss’ that he would incur in consequence of the ‘Claim’ that the Hernándezes brought against him in their second amended complaint,” said the ruling.

“In consequence of the plain text of the policy, we agree with Jiménez” that the claim occurred when he received the second amended complaint, said the ruling, in remanding the case for further proceedings.