The Supreme Court of Ohio recently issued an opinion on the LGR Realty, Inc. v. Frank & London Insurance Agency case that clarifies the statute of limitations on agency negligence.
LGR Realty brought this action alleging that they received an unsatisfactory insurance policy from Frank and London Insurance Agency.
The question that the court answered in this case was when the statute of limitations should begin in an insurance agency negligence claim.
The day the cause of action accrues is the day the statute of limitations begins to run.
In this case, the court decided that the cause of action began on the date the policy was issued, not when the party suffered an injury. Therefore, the case was time-barred.
The Supreme Court of Ohio specifically stated that:
“the delayed-damage rule does not apply to cause of action alleging negligent procurement of professional-liability insurance policy or negligent misrepresentation of the terms of the policy when the policy at issue contains a provision specifically excluding the type of claim the insured alleges it believed was covered by the policy.”
Frank and London Insurance argued that the statute of limitations clock began to run on the date the policy was issued, however, LGR Realty argued that the “delayed-damages” rule applies and the statute of limitations began when Continental Casualty Company, the commercial policy carrier, refused to defend and indemnify.
Under the delayed-damages rule, a cause of action does not accrue until a party suffers an injury, which would have extended the period for LGR Realty to bring this action.
The Supreme Court ruled that the delayed-damages provision does not apply and sided with the trial court to rule in favor of Frank & London Insurance Agency.
Want more information about the case? Check out this video from The Ohio Channel.
CITATION: LGR Realty, Inc. v. Frank & London Ins. Agency, Slip Opinion No. 2018-Ohio-334