In Allianz Ins. Co., et al. v. Guidant Corp., et al., ___ N.E.2d ___, 2008 WL 5412846 (Ill. App. Ct. Dec. 29, 2008), the Illinois Appellate Court upheld partial summary judgment in favor of the insurers that the policyholder could not aggregate multiple products liability claims under the policy's batch clause.
In Allianz, the policyholder sought coverage from its various excess insurers for bodily injury claims arising out of an implantable graft manufactured by the policyholder. The claims were made in multiple policy periods. The policyholder attempted to exhaust its retention in the first policy period by aggregating all of the claims made in later years under the batch clause. The insurers filed a motion for summary judgment, arguing that the claims could not be batched because the products did not have the same known or suspected defect or deficiency, as required by the batch clause.
The trial court rejected the policyholder's assertion that as long as multiple losses involve a particular product with any defect, the losses may be aggregated. The Appellate Court affirmed, holding that, based on the language of the batch clause, the policyholder could not merely batch claims involving the same product, but must show that the underlying claims involved both the same product and the same defect, and also that the defect must have been the subject of an "advisory memorandum" in order to aggregate the claims. In this case, the claims did not constitute a batch because the claims did not allege the same defect and there was no qualifying "advisory memorandum."
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