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Ohio court says Great American owes nothing on $3 million rehab verdict
The decision turned on a claims-made reporting deadline, and the court said missing it means there is no coverage to pursue, so prejudice arguments do not apply.
An Ohio appeals court ruled that Great American Risk Solutions Surplus Lines Insurance Company is not liable for a $3 million default judgment tied to a short-term rehabilitation facility, underscoring the stakes of claims-made and reported professional liability policies, Insurance Business reports.
The case stems from the death of a resident admitted after hip surgery, who choked on a hot dog while unattended by a staff member and died ten days later on June 29, 2020. Her daughter, acting for the estate, spent months trying to identify the facility's liability carrier, filed in 2020 to obtain medical records, and then brought a malpractice action in December 2021, alleging staff negligently provided food and failed to supervise the resident.
The facility did not respond, and the facility and its parent company filed for bankruptcy. After the daughter received permission to pursue the claim with recovery capped at insurance proceeds, a $3 million default judgment was entered in April 2024, but the insurer said it never received timely notice.
The court focused on the policy's professional liability coverage, Coverage D, which was described as “claims made and reported.” Coverage ran December 21, 2019 through December 21, 2020, with claims required during that period or within a 60-day extended window, and the malpractice suit was filed after that window and never reported to the insurer. The court said reporting requirements are not a technicality because they define the scope of coverage, and it also rejected arguments that general liability Coverage A could fill the gap, noting that Coverage A carried the same reporting requirement and excluded professional healthcare services.