First Circuit Bars Employment Practices Liability Insurance Coverage Under Related-Claims Clause
The First Circuit upheld that related-claims provisions can deny EPL insurance coverage.
Why it matters: This ruling clarifies how related-claims provisions can limit EPL insurance coverage based on claim timing, affecting risk strategies for insurers and in-house counsel.
- The ruling was issued by the First Circuit Court of Appeals on October 19, 2026.
- An administrative complaint filed in March 2019 and a lawsuit filed in January 2021 were held to be related claims.
- Both claims were considered first made before the policy period began, which started after March 2019.
- Enforcement of the related-claims provision led to denial of Employment Practices Liability insurance coverage.
On October 19, 2026, the First Circuit Court of Appeals affirmed that related-claims provisions in Employment Practices Liability (EPL) insurance policies can lawfully deny coverage when multiple claims stem from the same wrongful act and the earliest claim predates the policy period. The National Law Review reports that an administrative complaint filed in March 2019 and a subsequent lawsuit filed in January 2021 were deemed related.
Because the first complaint arose before the policy’s inception date after March 2019, the court decided that both claims were effectively "first made" before coverage began. This led the insurer to deny coverage for the later lawsuit under the related-claims provision.
EPL insurance typically covers claims such as discrimination, harassment, or wrongful termination by employees. However, related-claims provisions aggregate claims based on shared underlying facts or wrongful acts, fixing the policy trigger date to the earliest claim. This means that claims brought after coverage begins can be barred if earlier related claims were filed before the policy start date.
This decision serves as a critical reminder for employers, in-house legal teams, and insurers to closely analyze related-claims clauses and claim timing during policy negotiations and risk assessments. As emphasized by the Mondaq analysis, early administrative complaints may preclude coverage for later litigation even if it occurs during the policy period.
Legal professionals managing EPL risks should ensure policies contain clear language and understand how prior claims or complaints can impact coverage availability. This case illustrates how timing and policy wording can materially affect risk management outcomes.
The full First Circuit opinion provides further guidance and can be reviewed at the First Circuit’s official website.
By the numbers:
- October 19, 2026 — Date of First Circuit ruling
- March 2019 — Date of earliest related administrative complaint
- January 2021 — Date of subsequent related lawsuit