A provision deciding whether damage traceable to one design cause forms a single loss or as many losses as there are affected units.
Where a design or manufacturing defect affects a series of identical units, the decisive question is not coverage but counting: is this one loss, to which a single deductible and limit apply, or as many losses as units affected, with as many deductibles and limits? The answer moves considerable sums, in both directions, and it depends on a clause whose drafting specifies which cause is treated as unifying. Usual wordings adopt identity of cause, sometimes qualified by a time window, but the difficulty lies in the degree of abstraction accepted, since two failures of the same component arising from different material batches may be seen as one cause or as two. The clause is central in lines insuring equipment produced in series and operated for a long time, such as wind turbines, medical devices and automotive components, and it interacts with design defect exclusions, which first determine whether anything is covered at all before any counting applies.
Siemens Energy announced in June 2023 quality defects affecting rotor and bearing components across series of onshore wind turbines built by its Siemens Gamesa subsidiary, and put the related charge at around 1.6 billion euros.
serial loss clause, défaut de série, serial defect, sinistres sériels