No Coverage Under Claims-Made Policy Where No 'Claim' Made Against Insured During Policy Period

The Superior Court of Pennsylvania, applying Pennsylvania law, has affirmed a trial court's decision that coverage is not available under a claims-made policy where no "claim" was made against the insured during the policy period. Real Estate Mgmt. Advisors, LLC v. U.S. Liability Ins. Co., 2022 WL 2815359 (Pa. Super. Ct. July 19, 2022).

The insured, a real estate management firm, discovered that one of its employees had misappropriated funds from client escrow accounts. The insured subsequently deposited its own funds into the client escrow accounts to cover the losses caused by the employee's misappropriation. At the time the insured learned of the misappropriation, it had an errors and omissions policy providing coverage for Loss "that the Insured shall become legally obligated to pay because of Claims first made against the Insured during the policy period[.]" The policy defined "claim" as "a demand for money as compensation for a Wrongful Act" and "any judicial