is complied with by illinois a union insurance company the factual pretty clear and on eight eleven fourteen it was damage done to generators as a result of professional negligence of a company called mechanical design mechanical design was unsure about a liability insurance policy with illinois a union insurance company there was a claim made against them by my client the owner of the property in august design flaws in the generators called the catch  thirty eight sixty one three forty in august of this year where very similar circumstances here suit against an insurance an insurer garnish the insurance company in a second action and they held that was a direct action action of virginia's green court has called this a direct action it really is a direct action against i think i have a district court out of maryland which is being part force or not i have a direct action i have new cases out of missouri telling me this would be a direct action of course there are cases out of california in other states who say this wouldn't be a direct it's not that it helped my client know what it is is the statute talks about the direct action and it is a direct action against an insurance carrier and it is a case in which the carrier is should be stepping into the shoes of their hundred maryland has a statute very similar to the original statute in maryland if the insurance company doesn't give notice to the claimant they then have to show prejudice as a result of the breach of the conditional breach of policy in virginia the legislature much more harsh bright line task you don't give notice then is a waiver as a matter of act triggering coverage usually a notice of being filed against the insurer and serve upon the insured under a third party liability policy does not occur until after the expiration of the liability policy this policy is to give us notice the insurer did not give notice during the policy period but the claim with may while the policy was in force that's the issue here if the claim was made after the policy terminate that and what happened here because your honor this if the policy has expired in a claim arises after the policy expires there's no coverage there's no there's no there's no obligation on the insurer to give notice to the insurance company but their argument is was an error there i actually believe the district court i was confused as to when and if you read the transcript the judge actually said i'm confused as to when the actual notice was given but the notice was given during the policy period at that point in time mechanical design had in obligation to give notice to illinois union there was a condition in the policy found in two different places that mechanical design has a duty to give notice and if they fail in that duty it is a failure of a condition precedent to coverage thirty eight point two two two we all know about everybody who operates in the space knows about the statute which is why i gave notice to illinois a union three times during the course of filing suit against mechanical design looking for a response from mechanical from i'm sure there are licensed agent virginia i don't think that was ever developed one way or another and record and number two illinois union denied in their answer which is for the record i can give you if you want i can give you the record cites of that they denied it  s a brokerage it's a wholesale brokerage house and it was the agent of the insured not the insurer or after facts developed underlined the case became more clear to us that it was a mixed issue there are there are certain brokerages that are clearly brokers there are certain businesses that call themselves brokers that are clearly agents and then there's the next broker agent where your broker for certain as opposed to an agent is sufficient notice actual notice is sufficient notice there's a number of cases we cited for that proposition some of them came around about through phone calls some new came around about through letters to lawyers but the fact that the plaintiffs counsel received actual notice of the denial within forty one days october sixteenth two thousand and seventeen defeats the claim of them in your brief yes sir they are and they go so far as saying in a phone call to the lawyer from somebody else a third party a broker not an agent or a broker is sufficient they are definitely in the brief they are right on  a duty condition of the policy which therefore stripped away otherwise would have existed under the ensuring language of that policy stated another way the structure only applies to require notice to a third party when the insurance company actually owes coverage under the insurance insuring language but the insured itself commit some act which strips that coverage away the typical cases where you see that occurring is where the insured in this case mechanical design group would have breached the duty to cooperate or committed a misrepresentation or committed a fraud one of those other conditions that the insurance company or the insurer violated conditions of the policy you would have been covered for these actions and therefore were denying coverage to the third party is that a condition or is it a part of a contract that the insurer promises to do in order to  coverage i'm not sure i know how to answer that question mart cases point out the fact that the notice provision can not be used to expand coverage that would not exist under the ensuring language of policy the insuring language of the policy this being a claims made in reported policy discusses the fact that the the the initial act that triggers any coverage duty whatsoever is the submission of a claim by someone either the insured or in this case of third party now i want to correct one thing but under your view of things that's not a failure to do that is not really a breach of the contract it's it's  for in fact the facts that are in the record clearly show in and minutely show that the claim from gateway itself did not occur until nineteen months after the policy had expired september sixth sic term or sixth two thousand and sixteen nineteen months after this feb one two thousand and fifteen policy had expired that is the one and only minutes any notice from any person about disclosing so the statement that the claim occurred within the posse period is nowhere to be found and record it does not exist so the public policy reason and these types of statutes like the virginia statute is that the inch your insurer is the party who knows whether or not there's been a breach with the inch in short whether or not you define this failure to make to give notice of potential crime as a breach of a covenant or condition or term policy reason is that the a party other than the insurer the claimant here has no way of knowing that and that the burden of the policy reason for the to give that particular notice in this case it would look like that there would be no way for the climate to know that the insured failed to give the from a policy standpoint it would sing like we're going to rest with your clients ok i understand what you're saying and here the fact of the matter is that the very first that in illinois union ever heard of a potential climb in this case was the plaintiff's council's notice of october sixth september sixth two thousand and sixteen so someone has to normally seen occurrence type policy and this type of policy which quite frankly before this case i've not dealt with before this is the claims made in reported policy and there are cases that describe why these policies have been created where they're used because it limits the insurance companies risk to those dates and unlike an occurrence policy where are the insurance company is bound for months or even years after the expiration policy and that risk remains open these policies are designed specifically to prevent that once the policy expires without a claim from somebody being submitted it's gone no longer exists and there's nothing left to be applied to provide sixty extra days after february one twenty fifteen because the claim was submitted in one thousand monson not two months after the clim jackson from maryland district court stated specifically unlike the occurrence policy the insurer or potential liability ends when the policy expires therefore when the claims made policy the issue here expired there is nothing left d because there's an additional duty of they are the also was not applied applied to but this goes back to my point you asked why the insurer didn't give notice within the policy period we did not receive any notice of the claim until night he months after the policy period and then we immediately provided it didn't deny a letter to the insured and to the insurance broker or liant and forty one days  from receipt of the client that denial letter was attached to this e mail sent directly to plaintiff capsule forty one days after date of first nurse of the claim the plaintiff that a claim was not submitted until september sixth two thousand and sixteen creates a non occurrence of a conditional process to coverage in order for courage to exist and initially in the first place that claim has to be submitted within the policy it claims made in reported policy is the reporting of a claim within the policy period that way the insurance company can limit its risk to date certain and close the books on that risk when no claim has been submitted within that policy period plus extended reporting period if it's political which is not here the there is a nother case requirement of the submission of a claim within the policy period as a condition precedent to coverage and this requirement is not a mere notice provision rather it defined coverage because courage is never triggered and lo plastics twenty eighteen u s district lexus one seven five eight they stated conditions defining the coverage or scope of a policy as distinguished as distinguishing those furnishing of reference over forfeiture and this goes to judge d s s point may not be waived by the by the insurance company in other words a failure to provide notice does not waive those things which define the scope of coverage you can't waive those you can work where you can waive these duty provisions these these obligations that ensure or does that takes away the third right but you can't expand coverage that doesn't exist by relying on this notice provision which was alternately compl with the court and that mount holly case stated defenses for lack of i am quoting here the chances for a lack of basic coverage may not be waived for the effect of that would be to expand the policy to create a risk not intended to be undertaken so the statute does not apply if it didn't apply the plaintiff received actual notice with and the statutory notice period of forty five initial claim is the claim made by m d j or she would by my client the owner of the property against him d g that occurred during the policy period there's no question about that and your honor can find out of page three on one of three hundred of the by my client the claimant to illinois union sent out on nine to sixteen september second sixty received by them they have the fed ex receipt in their nine six twenty seven twenty six to him when the legislature has told us is not a duty issue or anything else when an insurer on a policy of liability insurance which is unquestionably has discovered is a breach of the terms or conditions statute is limited to something that could be conceived of as a defense to payment rather than just a claim that there is no coverage here period you know i'm saying there seems like there's a lot of case law saying that on these claims made or claims made and reported policies the failure to report that's not a defense that's just means there's no coverage period it's as though there was never a policy i would invite your honor really to reassure would branch case because  all i know but i guess i think i'm back where i was at the one jurisdiction i know that there you can point to some cases i've read a ton of cases that go the other way why is your review right i mean it just seems to me that it would if this were an occurrence policy then a failure to give notice is usually treated as a defense that can be waived when it's a claims made and reported policy the court a lot of courts have explained at great length that is not a defense anymore that's just there's no coverage when you're on i think if i policy here and that would really matter in occurrence policy but why does it matter here because your honor the language that the legislature has given us i think is pretty clear and talk about a breach of the terms or conditions so i then go to the policy and then we go to page fifty of the appendix we get to the policy in the very first the ensuring agreement it says it is a condition precedent to coverage of the policy that one of the claim first being made against the insure statute same statues are applies to policies in which the act triggering coverage occurs during the policy period and that is my client gives notice to m d g within the policy period that's the act triggering coverage and i sent this claim out to as many liability policies as i could find for any possible coverage that would apply to date i have received two attached details from hartford and from a slashed i'm waiting for coverage opinions from liberty mutual travelers and it goes on nothing in here about illinois union there is nothing about illinois a union in here and in fact your honor i guess the leap of faith that you have to at the statute on represent my client the statute says look for a notice from the insurance carrier look for a notice from illinois we sent notices to illinois and we got nothing back from illinois and it's a pretty easy statute to comply with all i had to do is send a notice