“Related claims” provisions are critical and necessary elements of “claims made” policies. That is because “claims made” policies cover only those claims that are first made — or are deemed first made — during the policy period. If a claim submitted to an insurer overlaps with, or is very similar to another claim previously filed against that same insured, the “related claims” provisions permit the insurer to “relate” the two claims together and treat them as a single claim deemed first made on the earliest date that any of the individual claims were made. For example, if a 2013 claim and a 2015 claim allege wrongful acts that are related, then the two claims are typically treated as a single claim deemed first made in 2013. So, a "claims made" insurance policy issued during a 2015-2016 policy period will not provide coverage for a claim first made in 2013.

However, what happens when an insurer is faced with multiple claims filed in various years that focus on the same behavior by an insured — although not necessarily containing the same underlying facts? This issue played out recently in Health First, Inc. v. Capitol Specialty Insurance Corp., No. 17-11181 (11th Cir. 2018). There, the Eleventh Circuit Court of Appeals upheld the application of what it characterized as “extremely broad” related claims provisions to bar coverage for claims “relating to a pattern or practice of behavior” that was the subject of prior claims first made before the policy periods at issue. In that situation, the wording and construction of the insurer’s related claims provision turned out to be a key deciding factor.

Background of the Health First Case

The coverage dispute in Health First arose out of multiple antitrust lawsuits that were filed against the insureds in 1997 and 1998, called Wuesthoff I and Wuesthoff II. Those early antitrust matters centered on an allegation that Health First engaged in anti-competitive behavior by restricting doctors’ abilities to admit patients to non-Health First affiliated hospitals. The insureds were provided coverage for Wuesthoff I under a policy that incepted in 1997. The insureds then obtained coverage for Wuesthoff II under the same 1997 policy, as well as a policy that incepted the following year. Eventually, both the 1997 and 1998 policies’ limits of liability exhausted.

Between 2005 and 2013, the insureds were hit with four additional antitrust lawsuits (Wuesthoff III, Wuesthoff IV, Hynes, and Omni) that were factually similar to Wuesthoff I and Wuesthoff II. The insureds sought coverage under several policies issued between 2005 and 2013, but the later insurers denied coverage, citing the fact that Wuesthoff III, Wuesthoff IV, Hynes, and Omni related back to Wuesthoff I and Wuesthoff II. A declaratory judgment action ensued.

On a motion for summary judgment, the trial court agreed with the insurers, holding that Wuesthoff III, Wuesthoff IV, Hynes, and Omni were related to Wuesthoff I and Wuesthoff II and therefore were correctly deemed a single claim first made during the 1997 and 1998 policy periods. Because the sole defendant insurer on risk during the 1997 and 1998 policy periods had exhausted its limits, there was no coverage available for the latest four claims.

The Eleventh Circuit’s Holding

The Eleventh Circuit affirmed the lower court’s holding, emphasizing the broadness of the policies’ related claims provisions, which included terms such as “in any way involving the same or related facts,” and “whether related logically, causally or in any other way.” The Eleventh Circuit explained: “The inclusion of ‘in any way’ in both of these phrases suggest they could reach conduct with a somewhat attenuated connection.” The Eleventh Circuit found that the various lawsuits all contained allegations of a continuing pattern of same or similar bad behavior — i.e., that Health First used its monopolistic power to coerce doctors to admit patients exclusively to Health First facilities. The court also rejected the insureds’ attempts to distinguish the lawsuits based on the identity of the plaintiffs or the time at which they were filed.

Cases like Health First emphasize the significance courts can attach to broad-form language in related claims provisions. In the absence of broad-form language, the Eleventh Circuit may not have taken a different view of the later insurers’ coverage arguments. For insurers that offer claims made policies, preamble language introducing related claims provisions is often outcome-determinative in connection with the scope and enforceability of related claims provisions.