American Family Mutual Ins. Co. v. Krop

This case presents question as to whether trial court properly dismissed as time-barred defendants-insureds’ counterclaim against plaintiffs-insurance company and its agent, alleging that plaintiffs failed to procure level of insurance that they had previously requested, and that such failure subjected them to liability in underlying lawsuit. While plaintiffs argued that relevant 2-year limitations period began on date that policy was issued to defendants (because defendants are chargeable for knowing contents of policy), Appellate Court, in reversing trial court, found that limitations period did not begin until date that plaintiff-insurance company denied coverage, since it was not until date of denial that defendants knew or reasonably should have known of their injury.