(Article from Insurance Law Alert, October 2018)
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An Illinois federal district court ruled that ten underlying suits against a policyholder constitute a single “claim” under a professional liability policy, subject to a single per-claim policy limit. Lloyd’s Syndicate 3624 v. Biological Res. Ctr. of Illinois, LLC, 2018 WL 4489589 (N.D. Ill. Sept. 19, 2018).
Biological Resource Center of Illinois (“BRCI”), a non-transplant anatomical donation business, was sued in ten actions alleging the mishandling and/or sale of human remains. Hiscox, BRCI’s professional liability insurer, brought a declaratory judgment action seeking a ruling that the policy’s $2 million per-claim limit applied to all underlying cases. The court agreed and granted Hiscox’s motion for partial judgment on the pleadings.
The policy provided that “[a]ll claims based upon or arising out of any and all continuous, repeated or related Wrongful Acts or Accidents . . . shall be considered a single Claim.” The court agreed with Hiscox that all claims in the underlying suits should be treated as a single claim because they all originated from BRCI’s allegedly negligent acts and breaches of duty. In so ruling, the court reasoned that “related” covered a broad range of connections, both causal and logical. Thus, although the underlying suits differed in their precise wording, they were related in their common allegations as to false representations and breaches of duty. The court rejected BRCI’s assertion that the underlying suits could not be a single claim because each complaint involved different anatomical donations, operative documents, and circumstances. Additionally, the court held that different theories of liability in the underlying suits did not negate “relatedness,” stating that “BRCI cites no authority to support the notion that underlying complaints must assert the exact same legal theories of liability to be considered a single ‘Claim.’”