Harvard to Appeal Missed Insurance Claim Deadline Ruling That Cost It $15M

Harvard University has signaled its intention to appeal last month’s federal court ruling that cost it as much as $15 million in insurance payments for failing to notify its insurer of its claim by the policy deadline.

The law firm Anderson Kill on November 29 gave notice to the Massachusetts federal district court that Harvard will appeal that court’s dismissal of its claims suit against Zurich American Insurance to the First Circuit Court of Appeals. The appeal notice was filed by attorney Marshall Gilinsky of the New York office of the insurance law firm.

On November 2, U.S. District Judge Allison D. Burroughs in Boston dismissed Harvard’s bid to force Zurich to pay legal costs under a $15 million excess insurance policy that she said was clear in its notification deadline and must be strictly enforced.

The judge ruled that Harvard was required to give notice, in writing, to Zurich of any claim no later than January 30, 2016, but that the school first gave notice to Zurich on May 23, 2017, well past the deadline.

Missed Deadline Costs Harvard $15M in Insurance for Admissions Policy Defense

“Put simply, because an unambiguous insurance policy must be applied as written; the notice provision in a claims-made policy must be strictly construed; and Harvard’s failure to satisfy a condition precedent vitiates coverage,” Judge Burroughs wrote.

The university has been defending its admissions policy against a lawsuit brought by Students for Fair Admissions filed in 2014 and a Department of Justice investigation launched in 2017. Both the primary and excess policies covered claims made during the year ended November 2015 provided Harvard notified the insurers by January 2016.

While $25 million of costs to date have been covered under a National Union Fire Insurance Co. primary liability policy, the university wants its $15 million excess insurance policy from Zurich to pick up costs above that amount.

Harvard had argued that Zurich had both constructive and actual knowledge of the claims against it prior to the deadline because its primary insurer — AIG subsidiary National Union Fire Insurance Co.—was covering the first $25 million of defense costs and because the Students for Fair Admissions lawsuit had been widely reported in the media and even discussed at meetings where Zurich personnel were present.

But Zurich denied coverage because it said Harvard missed the deadline for notifying it of its claim. Zurich said notice to the primary insurer did not satisfy its notice requirement.

Anderson Kill argued on behalf of Harvard before the district court that the insurer received the “benefit of the bargain” of its premium payments and should not be allowed to avoid liability due to what the university said was a technical matter.

“Insurance is not a game of cat and mouse,” the memorandum on behalf of Harvard to the district court stated. Harvard said Zurich had failed to cite a single case that permitted an insurance company to escape its obligations under such circumstances.

At the very least, the evidence presented disputed issues of fact that preclude summary judgment, Harvard maintained.

None of its reasons changed Harvard’s obligation to provide notice in full compliance with the terms of the policy, Judge Burroughs said in her ruling that is now being appealed.

The university is also appealing the judge’s order blocking further discovery.