Characterizing Separate Claims as Single Claims for Policy Coverage

June 25, 2013:  The “Burke’s Law” column featured on recently reviewed  the issue of characterizing separate claims as a single claim for purposes of policy coverage and looked at two recent cases in which the insurers and insureds used the characterization to advance their positions.  Many claims-made policies provide that all claims based on the same wrongful act or related wrongful acts will be considered a single claim for purposes of the policy and will be deemed to be made when the earliest claim is first made.  Using this “single claim” clause, the insurer in  Brecek & Young Advisors v. Lloyds of London Syndicate 2003, No. 12-3011 (10th Cir. May 13, 2013), argued that an arbitration claim made during the policy period actually related back to two previous arbitrations occurring prior to the policy period and, as a “single claim,” were made prior to the policy period such that no coverage applied.  In Carolina Cas. Ins. Co. v. Omeros Corp., No. C12-287RAJ (W.D.Wash. Mar. 11, 2013), the insurer and insured both attempted to use the provision to their advantage, with the insured arguing that a second claim made after the policy period related back to an initial claim first made during the policy period.  But because the first claim was excluded under the terms of the policy, the insurer argued that by characterizing the two claims as a single claim, the exclusion of the first claim required the exclusion of the second claim.

Insurers and insureds both use the legal fiction of the “single claim” to manipulate coverage dates, policy limits and other terms of the policy.  The characterization of separate claims as a single claim often results in interesting legal maneuvering and can have serious implications on the rights and obligations of the parties.