Jenner & Block

“Delaware Court Preserves Coverage In Recent “Related Claims” Decision,” Insurance Law Update

In a recent pro-coverage ruling by the Delaware Superior Court, Judge Mary M. Johnston rejected an insurer’s argument that the policyholder’s claim fell outside the current policy period based on its alleged relationship to several prior claims.  RSUI Indemnity Company v. Sempris, LLC d/b/a Budget Savers and Provell, Inc. f/k/a Budget Savers, C.A. No. N13C-10-096 MMJ CCLD, 2014 WL 4407717 (Del. Super. Ct. Sept. 3, 2014) (Sempris).  In concluding that the claims were not related, the court engaged in a careful analysis of the facts and allegations that formed the basis for each claim. Id. at *6-7. According to the court, the factual differences were critical against a backdrop of strong Delaware precedent supporting a broad interpretation of common “relatedness” policy language. Id.  As a result, policyholders should challenge insurers’ efforts to avoid coverage based on overbroad interpretations of the “related claims” provisions commonly found in claims-made insurance policies.  By encouraging close and careful examination of the facts and allegations on which the respective claims are based, policyholders are well positioned to protect the benefit of the insurance coverage purchased.