Opinion ID: 774879
Heading Depth: 3
Heading Rank: 2

Heading: Inception Date

Text: 31 We agree with the district court's conclusion that the Policy's inception date was May 12, 1995. As the court noted, [t]he term 'inception date' [in the Policy] refers to a singular event, and that term is used in conjunction with the phrase 'this policy.' National Union II, 1999 WL 1267461, at , 1999 U.S. Dist. LEXIS 19801, at . The only plausible interpretation is that the Policy was thus subject to only one inception date -- the date on which coverage under the Policy originally became effective, May 12, 1995. 32 Neither of the Endorsements on which National Union relies alters this conclusion. Endorsement No. 4 is a Coverage Continuation Endorsement which reads in pertinent part: 33 Item II Policy Period of Declaration [sic] page has been extended to read: Item II Policy Period From: May 12, 1996 34 To: May 12, 1997. 35 (Emphasis added). 36 The district court contrasted this language with the parties' use of the word amended -- within the same endorsement as well as Endorsements Nos. 1, 2, and 3 -- to alter the substance of provisions of the Policy. The court thus held that Endorsement No. 4 extended the duration of the Policy, the inception of which was May 12, 1995, rather than amending the Policy to create a new inception date. 37 Even if Endorsement No. 4 amended the terms of the original Policy, as National Union asserts, it did so only with respect to the Policy Period and not the inception date. It is undisputed that when the parties executed Endorsement No. 4, they did not create a new policy. 38 Rather, the endorsement form[ed] a part of the original Policy and extended coverage under that policy for an additional year, while specifying that [a]ll other terms, conditions and exclusion [sic] of the original policy will remain unchanged. Thus, the original Policy exists over multiple Policy Period[s]. Had the parties wished to achieve the result now urged by National Union, they could have drafted Paragraph I to exclude coverage for losses known or suspected as of the beginning or inception of the current Policy Period. Paragraph I of the Policy, however, refers to the inception date of this policy, making it clear that the inception date is defined in relation to the Policy as a whole rather than in relation to any particular Policy Period. Therefore, an extension of the Policy Period in an endorsement cannot change the inception date of the Policy as a whole, which was May 12, 1995. 39 Endorsement No. 5 likewise states that effective July 1, 1996, the coverage provided under [the Policy] has been extended to include Heileman, and that [a]ll other terms, conditions and exclusions of the original policy will remain unchanged. The endorsement thus leaves intact the language creating a single inception date for the Policy and setting May 12, 1995 as that date. Cf. St. Paul Fire & Marine Ins. Co. v. Metpath, Inc., 38 F. Supp. 2d 1087, 1093-95 (D. Minn. 1999) (holding that policy language barring coverage for damages known to insured before policy's effective date did not apply to damages sustained by subsidiary acquired by original insured after effective date). 40 National Union contends that Endorsement No. 5 creates a separate inception date with respect to th[e] specific risk at issue in this case. Appellants Br. at 18. But nothing in the Policy or any of the subsequent endorsements supports the view that each insured risk was given its own inception date. 41 National Union further contends that any interpretation of the Policy that requires coverage of risks that the parties did not contemplate when the Policy first took effect is unreasonable. Yet National Union has been exposed to no risks beyond those contemplated by the plain language of the Policy and subsequent endorsements, including those pertaining to the loss for which National Union now seeks to avoid liability. See Metpath, 38 F. Supp. 2d at 1094 (rejecting argument that policy interpretation that expos[ed][the insurer] to risks that it did not intend in issuing the policy is unreasonable). National Union could have avoided exposure to risks known to Heileman or Stroh at the time Heileman was added to the Policy by asking Stroh about them, or by specifically excluding such risks in the Policy or Endorsement No. 5. See id. (noting that if the insurer meant to exclude risks known at the time coverage was extended to after-acquired companies, it should have clearly worded the language of the Policy to say this.). 42 The district court thus correctly held that the inception date of the Policy was May 12, 1995, and correctly concluded that the known or suspected Loss provision of Paragraph I therefore did not bar coverage for the recall at issue.