Related claims

The related claims clause treats every claim arising from interrelated wrongful acts as one claim, under a single limit. The standard version in U.S. directors and officers (D&O) and errors and omissions (E&O) policies fits in one sentence. All claims arising from the same wrongful act or from interrelated wrongful acts are deemed a single claim, first made on the date of the earliest. Two consequences follow. The policy that responds is the one for the year in which the first claim was made, even if the tenth arrives four years later, with another insurer and under another limit. And the whole series sits under one limit and one retention. The insured sometimes benefits: a demand the current policy would have excluded under the prior knowledge exclusion falls back into an older policy. The insurer of the new year benefits more often, since the clause lets it send the file back to its predecessor. The fight is over how the link is defined. Broad wordings capture acts sharing a common fact, circumstance, situation, transaction or cause, and U.S. courts are split between a broad reading, satisfied by a common fact, and a stricter one that requires a sufficient factual nexus between the claims. The narrowest require the same cause, or the same facts. The difference from a series claim lies in the basis. A series claim ties damage to a single harmful event, to which the law assimilates a set of events sharing the same technical cause (article L. 124-1-1 of the French Insurance Code). The related claims clause, by contrast, groups distinct wrongful acts through their connection and fixes the attachment date at the first claim.