Raymond Zukaitis was a physician practicing medicine in Douglas County, Nebraska. Aetna issued a policy of professional liabilit
y insurance to Zukaitis through its agent, the Ed Larsen Insurance Agency. The policy covered the period from August 31, 2006, through August of the following year. On August 7, 2008, Dr. Zukaitis received a written notification of a claim for malpractice that occurred on September 27, 2006. Dr. Zukaitis notified the Ed Larsen Insurance Agency immediately and forwarded the written claim to them. The claim was then mistakenly referred to St. Paul Fire and Marine Insurance Company, the company that currently insured Dr. Zukaitis. Apparently without notice to Dr. Zukaitis, the agency contract between Larsen and Aetna had been canceled on August 1, 2007, and St. Paul had replaced Aetna as the insurancecarrier. However, when St. Paul discovered it was not the carrier on the date of the alleged wrongdoing, it notified Aetna and withdrew from Dr. Zukaitis's defense. Aetna also refused to represent Dr. Zukaitis, contending that it was relieved of its obligations to Dr. Z because he had not notified Aetna immediately of the claim. Dr. Z then secured his own attorney to defend against the malpractice claim and brought an action against Aetna to recover attorneys' fees and other expenses incurred in the defense. Should Dr. Z recover? Explain.
Answer: The physician is being sued. Insurance company should provide an attorney. If the doctor is negligent, insurance company should pay (that's why we have premiums). Dr. Z is sued, goes to agency, and notifies the agency. The agency doesn't notify Aetna in right amount of time, and also notifies the wrong company. Aetna doesn't have a liability because they were not notified in a timely manner. Larson is agent to Aetna. A principal's notice to agent=notice to principal. That's the same as notifying Aetna according to its claims procedure. This is not Dr.Z's problem. Aetna is wrong in denying coverage, and Dr.Z will succeed and not have to pay.
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