Federal District Court Confirms that Notice Prejudice Rule Does Not Apply to Claims-Made Policies

In Manufactured Housing Communities v. St. Paul Mercury Ins. Co., 2009 WL 3193157, (W.D.Wash. 2009), Judge Benjamin Settle confirmed that Washington law regarding claims-made policy notice requirements has not changed in 20 years since Safeco Title Ins. Co. v. Gannon, 54 Wn. App. 330, 774 P.2d 30 (1989), review denied, 113 Wn.2d 1026, 782 P.2d 1069 (1989). Judge Settle held that the notice requirement in St. Paul’s policy was not ambiguous and that the “notice prejudice rule” does not apply to claims-made policies. The decision recognizes the distinction between “claims-made” and “occurrence” policies in Washington, and rejects the argument that there has been a shift in Washington regarding the application of the “notice/prejudice rule” since the Gannon decision.

By Paul Rosner