The United States District Court for the Eastern District of Virginia, applying Virginia law, has held that two lawsuits alleging misconduct based on flawed drug testing procedures performed by the insured do not constitute "related claims" under the relevant professional liability policy. Navigators Specialty Ins. Co. v. Avertest, LLC, 2025 WL 2025365 (E.D. Va. July 18, 2025).
The insured, a provider of drug testing services, maintained claims-made professional liability policies for the 2021-2022 and 2022-2023 policy periods, issued by different insurers. In 2021, the insured tendered a lawsuit (the "2021 Action") under the 2021-2022 policy period (the "2021 Policy") alleging that the insured's testing practices led to false positives. In 2022, the insured tendered a subsequent lawsuit (the "2022 Action") under the 2022-2023 policy period (the "2022 Policy"). The insurer for the 2022-2023 policy period sought a declaration that the 2021 and 2022 Actions constituted "related claims" first made during the 2021-2022 policy period, precluding coverage under the 2022 Policy. The 2022 Policy defined "related claims" to mean "all claims arising out of a single act, error or omission or arising out of related acts, errors or omissions," and further defined "related acts, errors or omissions" to mean "all acts, errors or omissions ... logically or causally connected by any common fact, circumstance, situation, transaction, event, advice or decision." The court denied the insurer's motion for summary judgment.
The court determined that although both actions contained some of the same allegations, including that the insured prioritized the speed of drug testing results ahead of quality control, resulting in false positives, the actions were "not sufficiently similar" to constitute "related claims." The court also concluded that factual similarities between the actions "describe[d] general business practices, not the same underlying facts or transactions." The court reasoned that the actions involved differently situated plaintiffs who went to different lab facilities, the 2022 Action alleged deficiencies in collection procedures not addressed in the 2021 Action, and the actions were brought under different state consumer fraud statutes. Accordingly, the court concluded that coverage was available for the 2022 Action under the 2022 Policy.
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