Many liability insurance policies such as directors and officers (D&O), employment practice liability and professional liability policies are “claims-made” policies, meaning coverage is provided for claims first made during the policy period. Most claims-made policies have “related claims” and “interrelated wrongful acts” provisions, which are intended to combine multiple claims into a single policy period (with one limit of liability and one applicable retention) when there is sufficient overlap in the facts and allegations at issue in each claim. For example, if an insured is named as a defendant in two separate lawsuits that arise out of a single event and have the same or similar allegations, the two lawsuits might be deemed related and therefore, a single claim first made at the time of the earlier lawsuit. While this may appear to be simple, claims related issues are often tricky to navigate.
Related claims and interrelated wrongful act provisions can have a substantial impact on coverage and may at times lead to disputes between the insured and one or more insurers as to which policy period(s) should provide coverage. In some instances, it may be beneficial to an Insured to relate the two claims and at other times, it may not be. When multiple claims are consolidated and deemed a single claim, then only one limit of liability is available for that claim, and that limit might have been significantly exhausted by the earlier claim. The upside is that only one retention will apply instead of two.
Related claims disputes arise often and can be a major pain point for policyholders to navigate because there is no formula or one-size-fits-all answer when determining if multiple claims are related under an insurance policy.
Here, we discuss two recent decisions, both rendered in the last few months, that highlight how unpredictable related claims disputes can be.
On July 18, 2025, the U.S. District Court for the Eastern District of Virginia in Navigators Specialty Insurance Co. v. Avertest LLC, applying Virginia law, ruled that two lawsuits filed in Missouri against Avertest (the “insured” or “Avertest”) alleging certain misconduct related to drug testing procedures were not related claims as defined by the insurance policies. The coverage action was litigated in Virginia because the insured's principal place of business is Richmond, Virginia.
The insured is a drug testing company that conducts laboratory testing of biological samples for the presence of drugs in the bloodstreams of individuals involved in the criminal justice system. The insured had a claims-made professional liability insurance policy with Columbia Casualty Company (CCC) subject to a policy period of December 17, 2021 – May 1, 2022 (the “2021-2022 policy”). The insured also had a professional liability policy with Navigators Specialty Insurance Company (“Navigators”) on a claims-made basis for the policy period of May 1, 2022 – May 1, 2023 (the “2022-2023 policy”).
The insured was named as a defendant in two separate lawsuits filed by the same plaintiff lawyer. The first lawsuit, styled as a class action, was filed in February 2021 in the Circuit Court for the County of St. Louis, Missouri but was removed to the Eastern District of Missouri on April 6, 2021 (the “2021 complaint”). The 2021 complaint was noticed to CCC under the 2021-2022 policy. The 2021 complaint alleged generally that the insured prioritized speed in returning test results to its customers over ensuring that proper testing methods were utilized and followed, resulting in inaccurate test results. The 2021 complaint was settled before trial, and the case was dismissed on February 23, 2022.
On August 22, 2022, a second suit was filed in the United States District Court for the Eastern District of Missouri on behalf of eight additional plaintiffs by the same law firm that represented the 2021 plaintiff (the “2022 complaint”). The 2022 complaint alleged some of the same conduct as in the 2021 complaint, including allegations that the Insured prioritized speed of results over accuracy.
Navigators filed a complaint for declaratory judgment seeking a declaration from the Court that the 2021 and 2022 complaints were related and therefore, a claim first made during the CCC policy period (absolving Navigators from any duty to defend or indemnify). The insured found itself caught in the middle of the insurers’ dispute. The question before the Court was whether the 2021 and 2022 complaints were related.
The Court found that the 2021 and 2022 complaints contained similarities but also “significant differences.” Both alleged the same general root causes of the same type of injuries, i.e., speed over accuracy, and similar results, including false positives leading others to believe the plaintiffs used controlled substances. Both were brought by the same lawyers and relied on similar background facts and allegations.
The Court then identified certain “substantial differences” which included the following: The complaints were brought by different plaintiffs, the 2022 complaint was not pled as a class action, the consumer fraud statutes underlying the claims were different (the 2021 complaint was brought under the Missouri Merchandising Practices Act, whereas the 2022 complaint was brought under the Arizona Consumer Fraud Act and similar Massachusetts and Michigan statutes), and the complaints involved different time frames of the alleged misconduct.
The Court held that the allegations in the 2021 and 2022 complaints were not “sufficiently similar to constitute related claims” under the policies, noting that the difference in governing law underscored the “individualized aspects of each plaintiff’s respective claims; that is, the alleged injuries occurred in different jurisdictions.”
On August 25, 2025, the U.S. District Court for the District of Montana in Boyne USA, Inc. v. Federal Insurance Company ruled in favor of Federal Insurance Company (Federal) and found that two lawsuits filed against Boyne USA (“Boyne” or the “insured”) alleging the “same general conduct” were related.
The insured was named as a defendant in two separate class actions. The first was filed in Montana in December 2021 (the “Montana Action”). The Montana Action was brought on behalf of owners of residential units at several condominium hotels that were developed by the Insured at the Big Sky Resort in Madison County, Montana. The Montana Action was based on a mandatory rental management program established by the insured. The Montana plaintiffs alleged generally that the insured required unit owners to solely use the insured as the rental manager and required owners to sign a non-negotiable rental management agreement that could be unilaterally changed by the insured and as a result, the insured had exclusive control over the rental units and allegedly used the control to extract revenue from the unit owner, conceal the conduct and impose unreasonable costs on the owners. The Montana Action included claims for breach of fiduciary duty, constructive fraud, breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment and unfair trade practices/antitrust.
In December 2024, the insured was sued in the United States District Court for the Western District of Michigan (the “Michigan Action”). The complaint in the Michigan Action alleged similar claims to those alleged in the Montana Action. The Michigan Action was brought on behalf of owners of realty in three Michigan resorts developed by Boyne and was based on an exclusive rental management program operated by Boyne. The Michigan plaintiffs alleged that the owners were required to use the insured as their exclusive rental agent and were required to sign a rental management agreement that is non-negotiable and subject to unilateral change by the Insured. Like the Montana plaintiffs, the Michigan plaintiffs alleged that the insured used the control it is granted through the rental management program to siphon revenue that should be shared with realty owners and to impose excessive fees and costs on the owners. The Michigan Action alleged claims of constructive fraud, breach of contract, unjust enrichment/constructive trust, violation of section two of the Sherman Act, abuse of monopoly power, sale of unregistered securities under federal law and sale of unregistered securities under Michigan law.
At the time the Montana Action was filed, Boyne was insured under a D&O claims-made policy issued by Federal with a policy period of November 15, 2021 to November 15, 2022. When the Michigan Action was filed, Boyne was insured under a D&O claims-made policy issued by Federal with a policy period of November 15, 2023 to November 15, 2024.
Both policies contained the following identical related claims sections:
Federal moved for judgment on the pleading on grounds that the Montana Action and Michigan Action are “related claims” as defined by the policies and therefore, the Insured was only entitled to one $5 million limit of liability under the policies. Federal argued that both actions were related because they are both based on Boyne’s rental management program.
The insured argued that the two actions should not be deemed related and advanced two arguments. First, that the policy language was ambiguous and should be construed against Federal in favor of Boyne and second, even if the two policies were not ambiguous, the underlying actions were unrelated and therefore, the Insured was entitled to the full benefit of both policies. The Court concluded that the Montana Supreme Court (which has not specifically addressed whether the phrase “related claim” is ambiguous) would likely find the term as not ambiguous by applying the plain and ordinary meaning to the word “related.”
Having ruled that the policy language was not ambiguous, the question before the Court was whether the two actions were related under the policies. The Court compared the allegations in the Montana and Michigan actions and concluded that courts applying related claims provisions have held that underlying claims might be related even if they allege different causes of action and arise from different facts. The decision states that the relevant inquiry is whether there is a “single course of conduct” that serves as the basis for the causes of action.
Notably, and distinct from the Avertest case, the Court found that both the Montana and Michigan Actions alleged “the same general course of conduct” and deemed the two class actions to be “related claims” as defined by the policies.
