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A federal district court determined that there was no coverage for a claim where a related claim was first made before the policy period began. Urena v. Travelers Cas. & Sur. Co. of Am., 2025 WL 2826199 (D.N.H. Oct. 6, 2025).
A former employee of the insured company filed an administrative complaint against the company for employment discrimination in March 2019. After the administrative complaint was dismissed without prejudice and the employee received a right-to-sue letter, the employee filed a complaint in federal court in January 2021. She ultimately obtained a default judgment against the company. The employee filed a declaratory judgment action against the company's insurer, which had denied coverage for the claim, seeking an order that the company's insurance policy provided coverage for the default judgment.
The policy at issue contained an employment practices liability ("EPL") endorsement that provided coverage for "any Employment Claim first made during the Policy Period." An "Employment Claim" included, among other things, both a civil proceeding and an administrative proceeding. The EPL endorsement stated that "all Related Wrongful Acts are a single Wrongful Act . . . and all Related Wrongful Acts are deemed to have occurred at the time the first of such Related Wrongful Acts occurred whether prior to or during the Policy Period." The policy also aggregated multiple claims into a single "Related Claim" if the claims were "for Related Wrongful Acts." Based on this language, the insurer moved for judgment on the pleadings, arguing that the employee's administrative complaint and federal lawsuit constituted Related Claims deemed first made in 2019, before the policy incepted. The court granted the motion, rejecting all three of the former employee's arguments for coverage.
First, the employee argued that the EPL endorsement's identification of both civil proceedings and administrative proceedings as distinct types of Employment Claims meant that each type of proceeding should be independently eligible for coverage. The court rejected that assertion on the basis that the "plain language" of the Related Claims provision aggregated Related Claims into a single Claim. Pursuant to that provision, the employee's Claim was first made in March 2019, when the administrative complaint was served.
Second, the employee argued that the legal claims asserted in the lawsuit, which included a disparate impact claim, were based on different theories of liability than the claims she presented in the administrative complaint. Again, the court invoked the policy's Related Claims provision, which the court interpreted as "cover[ing] claims for Related Wrongful Acts even if the claims are based on distinct legal theories of legal liability." According to the court, since both complaints alleged discrimination in relation to pregnancy leave, they arose from the same common nexus and were thus a single Claim.
Lastly, the employee argued that the policy's "Continuity" and "Prior and Pending Proceeding" dates, which specified that the insurer would not be liable for loss from prior proceedings or from events known to the insured and likely to be the basis of a claim that occurred prior to December 4, 2015, meant that the policy contemplated coverage for loss occurring after December 4, 2015, but before the inception of the policy. The court summarily dismissed this argument, calling it a "logical fallacy" that disregarded the plain language of the policy.
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