GS2 Engineering & Environmental Consultants, Inc. v. Zurich American Insurance
956 F. Supp. 2d 686
| D.S.C. | 2013Background
- GS2 Engineering & Environmental Consultants, Inc. was insured under Steadfast Insurance Company, a Zurich subsidiary; Steadfast issued the last two renewal policies (2009 and 2010) for the period Aug 7, 2009–Aug 7, 2011.
- Steadfast often used Zurich’s logo and personnel; Zurich is the parent company, but the policies were issued by Steadfast, not Zurich directly.
- The 2009 and 2010 policies are claims-made-and-reported with an ERP option; coverage requires a claim to be made and reported within the same policy period, unless ERP applies.
- The Richland School District Two filed a claim against GS2; GS2 received service in 2010, but did not report the claim until after renewal, and GS2 did not report within the 2009 policy period.
- Steadfast received notice of the suit in Sept 2010; GS2 communicated with Steadfast in Nov 2010, meaning the claim was not reported in the same policy period as it was made.
- The court held Zurich is not liable, and the claim is not covered under the 2009 policy due to belated reporting, despite ERP considerations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Zurich’s liability as parent company | GS2 argues Zurich is liable due to alter-ego/branding and oversight. | Zurich did not issue the policies; Steadfast did, and Zurich has no direct liability. | Zurich not liable; summary judgment for Zurich on non-obligation ground. |
| Whether renewal extends reporting period under ERP | Renewal creates continuous coverage; ERP could extend reporting to subsequent policy periods. | Renewal does not extend reporting unless ERP applies; policy language requires same-period reporting. | Claims-made-and-reported policy requires same-period reporting; denial of coverage under 2009 policy for late reporting. |
| Exclusions and other coverage defenses | ERP ambiguity could be read to extend coverage; other policy terms may favor insured. | Pollution and preexisting-condition exclusions apply; either excludes coverage under 2010 or 2009 policy. | Coverage denied under pollution/preexisting-condition exclusions; 2010 policy threshold not met for coverage. |
Key Cases Cited
- Checkrite Ltd., Inc. v. Illinois Nat. Ins. Co., 95 F. Supp. 2d 180 (S.D.N.Y. 2000) (ERP does not implicitly create extension on renewal)
- Ehrgood v. Coregis Ins. Co., 59 F. Supp. 2d 438 (M.D. Pa. 1998) (ERP not extended on renewal; separate policies viewed distinctly)
- Cast Steel Prods., Inc. v. Admiral Ins. Co., 348 F.3d 1298 (11th Cir. 2003) (renewal interpretations distinct; analyzed in related context)
- Helberg v. Nat’l Union Fire Ins. Co. of Pittsburgh, 102 Ohio App.3d 679 (Ohio App. 1995) (continuous coverage language informs ambiguity favoring insured)