Insurance Coverage: Deemer Clauses in Claims-Made Policies

This CLE webinar will offer guidance to insurance coverage attorneys when arguing the effect of deemer clauses on the number of claims or occurrences and the proper and improper use of deemer clauses to expand or destroy coverage.

The International Risk Management Institute states that a claims-made policy provides coverage that is triggered when a claim is made against the insured during the policy period, regardless of when the wrongful act that gave rise to the claim took place. Claims-made policies usually exclude prior acts and pending litigation. "Deemer" clauses, sometimes referred to as batch, related claims, or interrelated claims provisions, "deem" all related claims arising from the same wrongful act to be one claim made on the date of the first claim.

Both policyholders and insurers may have various motives for arguing that the wrongful acts in question gave rise to only one or to multiple separate claims. Claims potentially spanning multiple policy years and implicating different types of policies are complex. Deemer clauses that require only a slight connection between claims may allow insurers to deny coverage for valid claims made within the policy period that policyholders reasonably expect to be covered.  

Coverage under all types of policies and claims can be at risk. The problem frequently arises when entity claims under CGL, EPL, or other policies for losses due to cyber, product liability, pollution, professional liability, etc., turn into claims against individual officers and directors, owners under separate D&O, E&O, or other policies, because insurers try to link the entity and individual claims. Deemer clauses may also wreak havoc with negotiated coverage. Examples include where a policy backdates a prior claim exclusion or limits a prior notice exclusion, but deemer clauses vitiate those changes.

Listen as this panel of insurance policy coverage experts offers practical guidance for policyholder and insurer counsel when interpreting and applying deemer clauses.