greater in order of magnitude" than
expected injury. There is obviously a
great deal of ambiguity in this concept.
While it has been touted as showing how
balanced the policies are, in practice it
eliminates coverage for the "expected"
claims when most courts would not
have done so based on the expected or
intended language.
2. Integrated occurrence
The policies use a concept called
Integrated Occurrence to batch together
claims from the same cause. For multiple
claims arising from the same product or
from exposures by two or more persons
to the same general harmful conditions
for longer than 30 days, the insured
can elect to give a Notice of Integrated
Occurrence. Such notice is not manda-
tory. The notice must be designated as a
Notice of Integrated Occurrence. For an
Integrated Occurrence, all of the occur-
rences or resulting claims that are part
terms, conditions and exclusions in the
policy in effect on the date the Notice of
Integrated Occurrence is given. Thus, all
similar occurrences or claims for which
regular notice has been given previously,
and all subsequent similar occurrences
and claims, even if after the policy termi-
nates, are included.
There are several ramifications from
the Integrated Occurrence concept.
One is that all the claims are treated
under the same policy and limit, so the
insurer gets to limit its exposure to one
policy. Another is that by telescoping
claims into one period, the insured can
more easily exhaust underlying limits
or per-occurrence retentions. A third is
that occurrences or resulting claims after
the policy terminates can be brought
under the policy's coverage if they arise
from products or completed operations
exposures. On the other hand, coverage
can be lost for occurrences from other
exposures that happen after the Notice
of Integrated Occurrence.
Notice is a singularly important concept
under the occurrence-reported policies.
It is the triggering event for coverage
under the policy. If any executive officer
or manager or equivalent level employee
of the insured's risk management, insur-
ance or law departments becomes aware
of an occurrence or claim that is likely to
involve the policy, "written notice" must
be given "as soon as practicable" during
the policy period or the discovery period
"as a condition precedent" to coverage.
Failure to provide the required notice
"shall result in forfeiture of any rights
to coverage." In all likelihood, forfeiture
will occur regardless of whether the
insurer is prejudiced by the failure or de-
lay. Most courts hold that failure to give
timely notice under a claims made policy
bars coverage regardless of prejudice
to the insurer, and there is no reason to
think a different rule will apply to notice
under a Bermuda form.