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A Chubb Ltd. unit has prevailed in a coverage dispute with an Arkansas school district based on the timing of the claim submitted under its claims-made, employment practices liability policies.
Celeste Alexander was a math teacher at Pine Bluff High School during the 2014-2015 school year who alleged in a lawsuit against the Pine Bluff, Arkansas, school district that the high school principal had harassed her, and then retaliated against her after she rejected his advances by calling her to meetings were no one was present, among other actions, according to Friday’s ruling by the U.S. District Court in Pine Bluff in Pine Bluff School District v. ACE American Insurance Co.
Ms. Alexander was notified she was one of several teachers terminated in a reduction in force in April 2015, according to the ruling. She filed a charge with the U.S. Equal Employment Opportunity Commission on Dec. 1, 2015, and litigation against the district in 2016.
The school district settled Ms. Alexander’s lawsuit for $50,000 and the court later also awarded her $100,000 in attorneys fees and $19,400 in costs.
Chubb Ltd. unit ACE denied coverage because it said the school district did not meet the reporting requirements for either of two separate Ace “claims-made and reported” policies, which it said are conditions for coverage under the policies.
The school district filed suit in U.S. District Court in Pine Bluff against the insurer, which ruled in Chubb’s favor.
Chubb had issued two employment practices liability “Ace Scholastic Advantage Educators Legal Liability” policies to the school district, one for the April l, 2015, to Feb. 1, 2016, period and a second for the Feb. 1, 2016, to Feb. 1, 2017, period, said the ruling. Ms. Alexander’s Dec. 1, 2015, EEOC complaint and subsequent lawsuit is considered a single claim under the policies, according to the ruling.
Focusing on the 2015 policy, the ruling said the district had until April 1, 2016, when the extended 30-day grace reporting period following the policy expiration date expired, to report Ms. Alexander’s Dec. 1, 2015, EEOC charge to ACE. But it first reported it to ACE on Oct. 3, 2016, six months later.
Discussing coverage under the 2016 policy, the ruling said there was no coverage because the claim was first made on Dec. 1, 2015, before the 2016 policy took effect.
“Ms. Alexander’s claim is not covered under either the 2015 or the 2016 policy,” concluded the ruling, in granting ACE’s motion for summary judgment in the case.
Attorneys in the case did not respond to requests for comment.
Dismissal of litigation filed against Liberty Mutual Insurance Co. units against an Ohio school district that was seeking reimbursement of funds stolen by a former employee was upheld by a federal appeals court based on a policy exclusion for employees earlier this month.
A Chubb Ltd. unit is not obligated to indemnify an apartment owner under a claims-made policy it issued to a contracting firm that expired 19 months before the insurer learned of the claim, says a federal appeals court in affirming a lower court ruling.