Doing things on time. Most of us understand the importance of that, and we try not to make lame excuses when we bust a deadline. Harvard, however, is in a big legal tussle at the moment with one of its insurance companies and, to be honest, sounds like a freshman who needs to get serious about their schoolwork.
The university failed to file a timely formal claim on expenses it incurred defending itself against a headline-making lawsuit challenging its affirmative-action admission policies.
In response, Zurich American Insurance refused to pay. Harvard responded by suing Zurich. Should it lose, Harvard will have been served a $15 million reminder that deadlines matter.
Harvard did alert its primary carrier of the admissions suit when it was filed in 2014. That carrier has been and will pay the university a total of $25 million, the limit on the policy it sold Harvard. But Harvard didn’t notify Zurich until May 2017, more than a year after its January 2016 policy claims notification deadline had come and gone.
Zurich says the case isn’t complicated. “Harvard’s admitted failure to comply with the notice provision,” its lawyers wrote in court papers, “is fatal to its claim for coverage.”
But Harvard’s lawyers argue Zurich “surely knew” about the affirmative-action suit “in the year after it was filed, especially given the significant, ongoing attention that the suit received in national and local news.”
They added: “The notice requirement is not an escape hatch for insurance companies to avoid liability to policyholders due to technical noncompliance.”
Zurich’s lawyers described Harvard’s argument as “creative yet specious” and “outlandish.”
Is this a case of an insurance company taking advantage of a technicality to avoid paying claims?
That happens from time to time, we know, but claims-made policies of the sort Harvard had with Zurich just don’t work that way.
In fact, every insurance policy has its notice requirements, though they do vary widely, with some requiring immediate notification or that it be made “as soon as practicable.”
The bottom line is that timely notice is essential, and the sooner, the better.
It’s good practice to make your notice in writing and sent via certified mail or a service like Federal Express, so there’s a record of receipt. You should also ask for confirmation of receipt of the notice.
A Boston judge is now reviewing the Harvard case. But it seems clear that Harvard had a deadline, and someone at one of the world’s most sophisticated institutions of higher learning bungled it.
Complying with your insurance company’s notice requirement is a simple way to protect your business from unnecessary litigation, not to mention avoiding the possible forfeiture of coverage paid for with your hard-earned premiums.
The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the U.S. An employee-owned organization, we’ve been providing our clients with the confidence to face whatever lies ahead for more than 100 years. For more information, contact us online or call 877-440-3304.