The Fourth Appellate District reversed a judgment. The court held that a workers’ compensation insurance policy specifying that the insurer had a defined time after the end of the policy period to audit the insured to determine the final premium was an executory contract, and, thus, time for the insurer to file a breach of contract claim did not begin running until the final-premium bill was sent to the insured.
State Compensation Insurance Fund (SCIF) underwrote workers’ compensation insurance for WallDesign Incorporated under two policies that provided coverage for the 2003 calendar year. SCIF cancelled the policies for non-payment of the estimated monthly premiums on December 15, 2003. The policies provided that the final premium due was to be determined by an audit of the payroll records of WallDesign that was to be completed within three years of the end of the policy period.
