Hunton Insurance Recovery Blog

A recent decision in federal court in Montana provides another example of different standards applied to assessing “related claims” under directors and officers (D&O) liability insurance policies. In this instance, the district court found that two class action lawsuits were related because they involved the same “general course of conduct.” Because the two claims were related, they were treated as a single claim first made in an earlier policy period. As a result, the Montana policyholder lost out on $5 million in potential coverage under a second policy in place when the second claim was asserted.

The Fifth Circuit in Evanston Insurance Co. v. Mid-Continent Casualty Co. recently held that multiple collisions caused by the same insured driver over a span of 10 minutes constitute a single occurrence subject to a $1 million limit in the insured’s primary policy with Mid-Continent. The holding reversed a lower court’s ruling that Mid-Continent is liable for an additional sum the excess insurer, Evanston, paid to resolve all of the claims arising from the collisions. At issue, a fundamental question about causation and coverage under commercial liability insurance.