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🔗 '''Batch clause''' is a [[Definition:Policy provision | policy provision]] found primarily in [[Definition:Product liability insurance | product liability]] and [[Definition:Product recall insurance | product recall]] policies that aggregates multiple [[Definition:Claim | claims]] arising from the same defective batch, lot, or production run into a single [[Definition:Occurrence | occurrence]] for the purpose of applying [[Definition:Deductible | deductibles]] and [[Definition:Policy limit | policy limits]]. By treating all injuries or damages traceable to one manufacturing batch as one event, the clause fundamentally shapes how much the insured retains and how much the [[Definition:Insurance carrier | carrier]] pays — a distinction that can mean millions of dollars in industries like pharmaceuticals, food and beverage, or chemical manufacturing.

⚙️ When a batch clause is triggered, the insurer examines whether the defective products at issue share a common production origin — same ingredient lot, same manufacturing run, same time-stamped output. If they do, every [[Definition:Bodily injury | bodily injury]] or [[Definition:Property damage | property damage]] claim linked to that batch is grouped together. The insured pays a single [[Definition:Self-insured retention (SIR) | self-insured retention]] or deductible for the aggregated batch rather than per-claimant deductibles, and the carrier's exposure is capped at one [[Definition:Per-occurrence limit | per-occurrence limit]] rather than stacking limits across each individual claim. The precise definition of what constitutes a "batch" is often heavily negotiated during [[Definition:Policy placement | placement]], and ambiguities in batch clause language have generated significant [[Definition:Coverage litigation | coverage litigation]], particularly when production processes are continuous rather than discrete.

⚠️ The practical importance of a batch clause becomes vivid during large-scale [[Definition:Product recall | product recalls]] or mass [[Definition:Tort | tort]] events. Without such a clause, an insurer might face hundreds of separate occurrences — each triggering its own limit — while the insured benefits from multiple deductible applications that reduce net exposure. With a batch clause, the economics flip: the insured faces one deductible (favorable) but only one occurrence limit is available (potentially unfavorable if aggregate damages are large). [[Definition:Underwriter | Underwriters]] and [[Definition:Risk manager | risk managers]] must therefore model batch-clause scenarios carefully, and [[Definition:Broker | brokers]] negotiating on behalf of manufacturers pay close attention to the clause's drafting to avoid unintended gaps in [[Definition:Coverage | coverage]].

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Occurrence]]
* [[Definition:Product liability insurance]]
* [[Definition:Product recall insurance]]
* [[Definition:Self-insured retention (SIR)]]
* [[Definition:Per-occurrence limit]]
* [[Definition:Aggregation clause]]
{{Div col end}}

Definition:Batch clause - Revision history

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