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President v. Jenkins2/6/2003
nkins as an additional insured on its group policy as of February 1, 1998. The predecessor policies issued by Princeton to Jenkins since 1987 were "occurrence plus" policies, the most recent of which was scheduled to terminate on February 1, 1998, coincident with the effective date of the inception of the Zurich policy. Such "occurrence" policies typically provide unlimited prospective coverage, that is for acts occurring during the period of the policy whatever the date of discovery and whenever reported. Thus, had the Princeton policy been in effect, as represented by Jenkins and reasonably understood by Zurich and C&R; there would have been seamless, uninterrupted coverage provided by both Princeton and Zurich covering, respectively, acts of negligence occurring prior to the inception of the Zurich policy, and claims made and reported after termination of the Princeton policy. Also, unlike Sparks, the Zurich policy offered Jenkins unlimited "extended reporting" coverage.
To be sure, Zurich's coverage diverges from customary "claims made" coverage in terms of retroactive protection. However, although the Zurich policy afforded no retroactive coverage for acts prior to the effective date of the policy, Jenkins was protected against professional liability claims for those incidents under his "occurrence plus" policy with Princeton. Thus, unlike the situation in Sparks, here there would have been no gap in coverage in the transition from "occurrence" to "claims made" protection but for the premature cancellation of the Princeton policy due to Jenkins' failure to pay premiums due.
It is solely this lapse on the part of the insured, due exclusively to his own actions, that has created the break in protection and, therefore, Jenkins should not now be heard to complain that Zurich's limited retroactive coverage was neither reasonable nor expected. Indeed, nothing in the record suggests other than that good faith bargaining took place between the parties, that the terms of the policy were specifically bargained for and understood by Jenkins, and that the insured specifically elected to purchase this policy with limited retroactive coverage. We therefore reject Jenkins' argument because the unambiguous provisions of the policy clearly restricted retroactive coverage, the premiums were presumably reduced to reflect this limited protection, and such protection was adequate given the facts known and available to Zurich and C&R;at the time the policy was issued. Under these circumstances, we hold that the limited retroactive coverage afforded by Zurich was both reasonable and expected, and not violative of public policy. Thus, the coverage limitations of the policy are enforceable and preclude coverage of Jenkins' claim in this instance, arising as it does from alleged negligence occurring before the policy's effective date.
Jenkins argues, alternatively, that even if the policy's coverage restrictions are enforceable, his claim is nevertheless covered since it arises from an alleged act of negligence occurring after the effective date of the policy, which, because of an ambiguity, he construes to be January 1, 1998. The motion judge found no such ambiguity, and " hat the document couldn't be clearer." Judge Weiss reasoned:
It is clear, unequivocal, effective date of policy for incident, 2/1/98, insurance company, Zurich Insurance Company.
Subsequent thereto, Exhibit D, shows that Zurich issued a binder to Dr. Jenkins. Binder period from 2/1/98 to 4/1/98; policy periods.
Thereafter, there's a certificate of insurance, . . . in which it says: "Professional liability insurance, effective date, 2/1/98."
We agree.
It is
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