Opinion ID: 2196990
Heading Depth: 4
Heading Rank: 1

Heading: Textron's Domestic/International Distinction

Text: In so holding, we reject Textron's argument that clause seven applies only to international claims. Under Textron's theory, coverage for international claims is derived from the provisions of the Amendatory Endorsement while coverage for domestic claims [3] is derived solely from the Insuring Agreements. Textron asserts that given this dichotomy, it logically follows that the one-year notice provision that appears in clause seven applies only to international claims and the notice provision requiring notice as soon as practicable, which appears in the Insuring Agreements, applies only to domestic claims. [4] We are of the opinion that there is simply no basis for Textron's assertion that domestic coverage and international coverage are derived from different portions of the policies. We think it clear that coverage for all property damage, whether its locus is domestic or international, is derived from Part I of the Insuring Agreements, as amended by clauses five and seven. Thus there is a definite interplay between the Insuring Agreements and the Amendatory Endorsement, which Textron either fails to recognize or refuses to acknowledge. [5] In addition, Textron errs in its characterization under this theory of clause seven as a notice provision. In order to expose the error in this characterization, we must explore the differences between notice provisions and reporting requirements. Whereas both types of provisions require a literal notification of the insurer, the notification serves materially different purposes in the two provisions. In the case of a notice provision, which is typically found in occurrence and claims-made policies and usually requires notice as soon as practicable, the notification serves to facilitate the timely investigation of claims by bringing an event to the attention of the insurer and allows an inquiry before the scent of factual investigation grows cold. Dalzell v. Northwestern Mutual Insurance Co., 218 Cal. App.2d 96, 103, 32 Cal. Rptr. 125, 129 (1963); see also Siravo v. Great American Insurance Co., 122 R.I. 538, 542, 410 A.2d 116, 118 (1980) (notice affords an opportunity for investigation to protect [the insurer's] interests); Johnson Controls, Inc. v. Bowes, 381 Mass. 278, 282, 409 N.E.2d 185, 187 (1980); 2 Rowland Long, The Law of Liability Insurance, § 13.02 at 13-8 (1992). In contrast, in the case of a reporting requirement, which is typically found only in a claims-made-and-reported policy, the prescribed notification actually defines the scope of coverage provided by the policy, as the transmittal of notice of the claim to the insurance carrier is the event that triggers coverage. Zuckerman v. National Union Fire Insurance Co., 100 N.J. 304, 324, 495 A.2d 395, 406 (1985); see also Gulf Insurance Co. v. Dolan, Fertig and Curtis, 433 So.2d 512, 515 (Fla. 1983) (coverage depends upon reporting a claim during the policy period). When we view it against this background, we think it quite clear that the notification requirement in clause seven operates to define the scope of coverage and may be appropriately characterized as part and parcel of the coverage granted by Liberty. Accordingly we reiterate our previous determination that the latter portion of clause seven is in fact a reporting requirement, such as that found in a claims-made-and-reported policy. In so holding, we recognize the peculiar nature of Liberty's policies, which provide coverage for property damage on an occurrence basis yet include a reporting requirement traditionally only found in claims-made-and-reported policies. Although such dual characteristics preclude categorically labeling the policies as either occurrence or claims-made-and-reported policies, that fact in no way undercuts our analysis. When dealing with hybrid creatures, such as Liberty's policies, we emphasize that our inquiry into the nature of any provision must necessarily be guided by the operation and substance of a particular provision rather than any label that may coincidentally or haphazardly be attached to a policy. For the above reasons we reject Textron's assertion that clause seven operates as a notice provision that only applies to non-domestic claims.