Delaware’s Supreme Court Addresses What Constitutes a “Claim for Damages”

The Supreme Court of Delaware has held that a letter received by an insured from an attorney purporting to represent unidentified plaintiffs and forecasting future litigation did not constitute a “claim for damages” under a claims-made policy. Zurich Am. Ins. Co. v. Syngenta Crop Prot., LLC, 2024 WL 763418 (Del. Feb. 26, 2024).

Before the coverage period of its claims-made policy began, the insured chemical manufacturer received a letter from an attorney who asserted that his firm had been retained by “numerous victims” with Parkinson’s disease that was allegedly caused by a chemical compound manufactured by the insured. The letter forecasted a “huge number of copycat lawsuits” and proposed arrangements to manage the predicted litigation. The letter did not identify any client, and no client was identified until lawsuits that listed the law firm as counsel were filed during the policy period. After receiving a copy of the letter, the insurer sought a declaratory judgment that it had no coverage obligation for the later lawsuits because the initial “claim for damages” had been made when the attorney sent the first letter prior to the policy period’s inception. The trial court ruled in favor of the insured, granting summary judgment against the carrier.

On appeal, the Supreme Court of Delaware affirmed, concluding that a “claim for damages” was a “demand or request for monetary relief by or on behalf of an identifiable claimant.” The letter at issue, according to the court, was at most a request for “an opportunity to discuss a process by which claims not yet made might be adjudicated or otherwise resolved in the future” and did not seek monetary relief. Moreover, noting that “the existence of an actual, identifiable claimant is implicit in the concept of a ‘claim for damages,’” the court deemed the letter’s failure to identify any claimant fatal to the insurer’s argument.