The U.S. Court of Appeals for the Fourth Circuit recently took a broad approach to interpreting the scope of “related” claims in claims-made professional liability policies.[1] The Court, applying Virginia law, held that two separate lawsuits filed during different policy periods – which policy periods were insured by two separate insurers – were sufficiently related such that they constituted a single claim and were rightfully covered under the earlier policy period.

Avertest, LLC (“Avertest”), a biological testing company, found itself a defendant in two lawsuits filed within eighteen (18) months of each other. The first suit, a class action (uncertified) styled as Gonzalez v. Avertest, LLC, was filed in February 2021.[2] At that time, Avertest carried professional liability insurance through Columbia Casualty Company (“Columbia”). The Gonzalez complaint alleged various defects in Avertest’s testing methods and criticized its quality control techniques. Avertest initiated a claim with Columbia, which accepted Avertest’s defense and ultimately paid to settle the suit on Avertest’s behalf.