Under a “claims-made” liability insurance policy, whether a communication to the insured constitutes a “claim” or a “claim for damages” determines whether the policy is applicable to the claim. The Delaware Supreme Court held that an unclear and amorphous letter from an attorney did not constitute a “claim for damages” required by the policy.

A claim for damages is a demand or request for monetary relief by or on behalf of an identifiable claimant. The phrase “claim for damages” means something akin to a request for the enforcement of a right or demand for a remedy in damages. A claim for damages need not be a demand for a specified sum but it must be a demand or request for monetary relief by or on behalf of the identifiable claimant.

Prior to inception of the insurance policy, a lawyer wrote a letter to the insured global agrichemical company calling for a meeting to discuss multiple possible claims alleging that a chemical compound used in herbicides, paraquat, had caused Parkinson’s disease in a number of users. The letter said that the firm had been retained by numerous victims of the disease in connection with claims for personal injuries and damages, but no particular client was referred to. The letter asked for a discussion whether a few test cases could be run to avoid the enormous time and expenses of pursuing cases all over the country to determine whether the chemical was responsible for the onset of Parkinson’s disease. The court found that the letter was insufficient to constitute a “claim for damages”. Only the vaguest reference to damages was made and this was not sufficient, particularly as the letter did not relate to any individual claimant. The court therefore held that there was no claim for damages prior to the inception of the policy. A court had previously held that there was also no misrepresentation inducing the policy because the failure to disclose was not material under Delaware law.

What is a claim needs to be tightly defined in policy wording. The reference to “damages” in this case was important to the court’s decision that a specific claim was required. On similar wording, a similar decision is likely in South Africa.

[Zurich American Insurance Co. v Syngenta Crop Protection LLC, case no 135,2023 in the Supreme Court of the State of Delaware (February 26, 2024)]