No Cause of Action Under Louisiana’s Direct Action Statute When Claims Not Reported During Claims-Made-And-Reported Professional Liability Policy
The Fifth Circuit affirmed a grant of summary judgment in favor of Continental Casualty Company. The suit involved a claims-made-and-reported professional liability policy which was issued to Titan Title. Titan issued title insurance policies as an authorized agent of First American Title Insurance. The underlying suit alleged that Titan negligently issued these policies. Continental Casualty refused coverage because, while the claim against Titan was made during the policy period, it was not reported to the insurer. First American argued that Louisiana’s Direct Action Statute vested them with a cause of action against the insurer as an injured third party. Both the district court and the Fifth Circuit determined that an injured party could not sue under the Louisiana Direct Action Statute based on a claims-made-and-reported policy when the claim was not reported to the insurer before the policy expired.
First American Title Insurance Co. v. Continental Casualty Co., No. 12-30336 (5th Cir. Feb. 28, 2013).