What Are Related Claims Under a Claims Made Policy?
The insured in a new case from the Eighth Circuit Court of Appeals got the short end of the stick every time. Highwood Properties Inc. v. Executive Risk Identity, Inc. The insured reported a claim under a claims made policy, and it was rejected for no coverage. The insured reworked its next policy to provide coverage for the same type of claims. When a similar claim came in, the insured again reported it. The insured's new policy would have covered it - but the insured lost anyway. The Court of Appeals decided that it was related to the same facts as the first reported claim, under the old policy which did not provide coverage.
This is a fact-intensive case with tough arguments on both sides. It's also not uncommon - an insurance policy changes in a renewal year, and whether it covers a claim depends on which policy year applies. One wrinkle that might have changed the result in this case: if the insured had a paper trail indicating that the insured and insurer intended for any new claims out of the same set of facts to be covered. The intention of the parties should control, and the renewal policy would cover the second claim.