As per the claim series clause, where a series of losses or damages or bodily injuries and deaths happen due to factors which are directly or indirectly related, then claims for such losses shall be added together and treated as one claim. Such claims shall be deemed to have been made at a single point of time when the first claim was made in writing.

A claim for series would be defined as the series of two or more claims arising due to a single common clause, i.e., unifying factor of some kind, which happens, example

  • Due to the same fault in designing, manufacturing or instructing for use or product labelling
  • Due to supply of same products/services showing some defects

In those situations when the series of claims are aggregated under a single claim head, the deductible is also applied on the aggregate amount and not on the individual claims.

Read More: What is Construction All Risk Insurance?

However, there shall be no coverage for claims which arise from one specific cause which are filed later than 3 years of filing the first claim of the series.

Many times, it is the unifying factor which needs to look into. In such situation, it depends on the precise wording of the policy document which clearly defines the unifying factor. Here the factor is often a common origin of some act or event which links various claims.

In those situations, where the description of the event or act is specific, it will not be easy to aggregate the claims, but where the wide words are used to describe unifying acts, it would be quick to find the claims that need to be aggregated.

An occurrence which is mainly not same as loss as one occurrence may lead to a plurality of losses. Nevertheless, it is essential to carefully scruitinised losses circumstances to know whether they involve the unity that justifies their being arising out of occurrence.

Case

Incepted in 2013, L.J Work had established a name for itself in the construction sector. Since its formation, the company has successfully completed various construction projects in Delhi and Pune. Though, the company always acts diligently, it has also bought a construction all risk insurance policy to get financial coverage in case any loss or damage happens.

Last year, when the company was building a five-story building in Pune, an earthquake happened and damaged two pillars of the under constructed building. Thankfully, there was no loss to life, and the company approached its construction all risk insurer to get the coverage for the financial losses or damages to the building.

A few weeks later, the engineer at the construction site found some cracks in the roof as well. The engineer called for the investigation and the investigation results found that damages happened due to the impact of the earthquake.

Earlier, they were minor and therefore, did not come into notice but now they became visible in a few weeks period.

When L.J Work approached the insurer with the second loss, the construction all risk insurance company considered both the events under a single claim. The first claim happened due to earthquake which also caused damages to the other building parts, which were later came to notice. It means, the peril was same in both the events and there were a series of claims.

L.J Work’s construction all risk insurance policy also comes with a deductible limit of Rs Rs 50,000. As in this case, there were 2 claims which were aggregated under one single claim, only one deductible was payable. The insurer settled the claim after deducting Rs 50,000 as deductible which was paid by L.J Work.

On the other hand, if several claims were not possible to aggregate due to lack of a unifying factor, a deductible would have to be paid for each claim. It means, if L.J Work claims were considered different, the insurer would have asked to pay separate deductibles for each claim.

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