Claim First Made When EEOC Complaint, Not Lawsuit, Is Filed

A claims-made employment practices liability insurance policy did not cover an employment lawsuit when the employer’s first notice of a claim was an administrative charge filed before the policy period, a Pennsylvania court ruled. The case is LA Weight Loss Centers, Inc. v. Lexington Insurance Co., 2006 WL 689109 (Pa.Comm.Pl. March 1, 2006). A “claims made” policy is unlike an “occurrence” policy in that the former covers claims only if they are first made within the policy period, while the latter covers damages that happen during the policy period, no matter when a claim is made.
The court said a charge filed with the federal Equal Employment Opportunity Commission constitutes the first notice of a Title VII lawsuit, because the later lawsuit filed within the policy period was defined by and covered the same allegations as the administrative claim.

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