88 F.3d 632 (8th Cir. 1996), 95-3090, Lexington Ins. Co. v. St. Louis University

Docket Nº:95-3090.
Citation:88 F.3d 632
Party Name:LEXINGTON INSURANCE COMPANY, Plaintiff-Appellee, v. ST. LOUIS UNIVERSITY, Defendant-Appellant.
Case Date:July 08, 1996
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 632

88 F.3d 632 (8th Cir. 1996)

LEXINGTON INSURANCE COMPANY, Plaintiff-Appellee,

v.

ST. LOUIS UNIVERSITY, Defendant-Appellant.

No. 95-3090.

United States Court of Appeals, Eighth Circuit

July 8, 1996

Submitted Feb. 15, 1996.

Rehearing Denied Aug. 9, 1996.

Page 633

F. Douglas O'Leary, St. Louis, MO, argued, for appellant.

Paul Stephen Turner, Chicago, IL, argued (Edwin D. Akers, Jr., St. Louis, MO, James D. Wangelin and Marc J. Pearlman, Chicago, IL, on the brief), for appellee.

Before BEAM, LOKEN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

LOKEN, Circuit Judge.

Lexington Insurance Company ("Lexington"), a London-based insurer, issued a liability policy to St. Louis University for claims made during the period July 1, 1990, through July 1, 1991. On May 20, 1991, Shelly McCormick sued the University for medical malpractice allegedly committed in 1979. The University mistakenly listed McCormick's claim as a 1979 rather than a 1991 claim on "loss run" reports submitted to Lexington before the policy expired. Therefore, the district court 1 granted summary judgment declaring that Lexington need not indemnify the University for McCormick's claim because it was not made and reported during the policy period. The University appeals, seeking to distinguish controlling Missouri and Eighth Circuit cases construing claims made policies. We affirm.

1. The issues here turn on the crucial difference between "occurrence" and "claims made" liability insurance policies. Under an occurrence policy, there is coverage for negligent conduct of the insured that occurs during the policy period. A claims

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made policy, on the other hand, provides coverage if the third party's claim is made against the insured, and brought to the insurer's attention, during the term of the policy. See Esmailzadeh v. Johnson & Speakman, 869 F.2d 422, 425 (8th Cir.1989). Both types of policies require the insured to promptly notify the insurer of possible covered losses. With a claims made policy, however, that notice is not simply part of the insured's duty to cooperate. It defines the limits of the insurer's obligation--if there is no timely notice, there is no coverage. A claims made policy "allows the insurer to more accurately fix its reserves for future liabilities and compute premiums with greater certainty." FDIC v. St. Paul Fire & Marine Ins. Co., 993 F.2d 155...

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