A related claims clause, often called an aggregation clause, decides when several claims are treated as a single claim. It governs how the limit of indemnity and the excess apply where a number of errors, clients or losses are connected.
Grouping claims together can help or hurt the insured, depending on the limit structure:
The wording of the aggregation language therefore matters enormously to how far the cover stretches across a multi-claimant problem.
The interpretation of aggregation wording was settled by the Supreme Court in AIG Europe Ltd v Woodman [2017] UKSC 18. The policy aggregated claims "arising from similar acts or omissions in a series of related matters or transactions". The court held that the transactions must be related in a real, intrinsic sense, not merely similar, and that "related" requires some real connection between the transactions, judged objectively. The decision is the benchmark for reading aggregation clauses in solicitors' and other professional policies.
An earlier House of Lords decision, Lloyds TSB General Insurance Holdings v Lloyds Bank Group Insurance Co Ltd [2003] UKHL 48, examined "originating cause" wording and confirmed that different aggregating language produces different results, so the precise words used cannot be assumed.
For solicitors, the SRA Minimum Terms and Conditions prescribe the aggregation wording, grouping claims arising from one act or omission, or from related acts or omissions in a series of related matters or transactions. Firms cannot negotiate this away, which is why understanding how it applies to their book of work matters so much.
Mass-advice situations are the danger zone. A surveyor using a flawed valuation methodology across many properties, an IFA giving the same unsuitable recommendation to a cohort of clients, or a solicitor making the same drafting error in many similar transactions, all face the question of whether the resulting claims sit under one limit or many. The answer can be the difference between full cover and a large uninsured shortfall.
Apex examines the aggregation wording against the firm's actual exposures and limit structure, and considers whether the limit of indemnity is adequate on an aggregated basis. For sector detail see the solicitors PI guide, the surveyors PI guide and the IFAs PI guide.
The aggregation question feeds directly into how much cover a firm should buy. A firm whose claims would aggregate into one is effectively relying on a single limit to absorb a systemic error across many clients, so the limit must be sized for the worst-case aggregated exposure, not the average single claim. Where claims would not aggregate, the reinstatement of the limit and the number of claims in a year become the live issues. Reading the related claims clause against the firm's actual book is the only way to judge whether the limit is genuinely adequate.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.