Homestead Ins. Co. v. American Empire Surplus Lines Ins. Co. (1996) 44 Cal.App.4th 1297 involved a cross-complaint between two insurers, each of which had issued a "claims made" policy to the same insured, an escrow company, in consecutive years. (Id. at p. 1300.) John and Betty Minnick filed a complaint against the insured and others during the term of a policy issued by American Empire Surplus Lines Insurance Company (American Empire). The Minnick action arose from a commercial real property sales transaction. Carey and Beverly McLeod and other plaintiffs later filed a complaint against the insured, the Minnicks, and others during the term of a policy issued by Homestead Insurance Company (Homestead), alleging that the defendants had defrauded investors in a series of transactions. (Id. at pp. 1301-1302.) The insured and Homestead alleged that the McLeod action was a claim made during the prior policy period because the Minnick and McLeod actions arose from "a 'series of interrelated acts' " and therefore were " 'treated as a single claim' " under the terms of a provision in the American Empire policy. (Id. at pp. 1302, 1304-1305.) In Homestead, the Court noted that the purpose of a "claims made" policy, as distinguished from an "occurrence" policy, is to limit the insurer's risk to claims made during the policy period regardless of when the injury or its cause occurred. This reduces the insurer's potential liability on a policy and results in a lower premium for the insured. (Homestead, supra, 44 Cal.App.4th at p. 1304.) The Court concluded that the McCleod action was a claim made after the American Empire policy period and that coverage under the American Empire policy did not extend to claims made after the policy period. (Id. at p. 1305.) The Court stated that the "single claim" provision did not cause claims made during different policy periods to merge into a single claim, and did not shift liability from one insurer to another. (Ibid.) The Court stated further that a claim, or multiple claims treated as a single claim, must be made during the policy period to trigger coverage. (Ibid.) In Homestead, the Court of Appeal noted that the purpose of a "claims made" policy, as distinguished from an "occurrence" policy, is to limit the insurer's risk to claims made during the policy period regardless of when the injury or its cause occurred. This reduces the insurer's potential liability on a policy and results in a lower premium for the insured. (Homestead, supra, 44 Cal.App.4th at p. 1304.) The Court of Appeal concluded that the second action was a claim made after the American Empire policy period elapsed and that coverage under the American Empire policy did not extend to claims made after the policy period. (Id. at p. 1305.) In doing so, the Court of Appeal stated that the "single claim" provision did not cause claims made during different policy periods to merge into a single claim and did not shift liability from one insurer to another. (Ibid.) The Homestead court stated further that a claim, or multiple claims treated as a single claim, must be made during the policy period to trigger coverage. (Ibid.) The court, noting that the position of the insured and Homestead would "stretch the tail" of the first insurer's policy to include a claim made against the insured during the second policy period, rejected the argument because "lengthening the policy tail . . . is the very thing 'claims made' coverage exists to prevent." (Homestead, supra, 44 Cal.App.4th at p. 1305.) The court held the definition of "claim" in the first policy (" 'claims arising out of the same act or out of a series of interrelated acts shall be . . . treated as a single claim' ") (id. at p. 1303) remained subordinate to, and did not vary, the requirement in the policy that the first insurer agreed to pay for loss from claims made against the insured "during the policy period," and to be covered by the policy, a claim-or a group or series of claims "treated as a single claim"-still had to have been made during the policy period. (Id. at pp. 1303-1306.) In sum: Two insurers issued one-year "claims made" policies to the insured during consecutive years, and one action was filed against the insured during each of the policy periods. The first action alleged fraud and negligence in connection with the sale of a specific property on Valderas Drive; the second action alleged similar misconduct as to numerous sales, including the sale of the Valderas Drive property. (Id. at pp. 1301-1302.) The insurer on the second policy asserted that the first policy should cover the claims arising from the second action because it was related to the first one. The court rejected that argument and instead held that the first insurer had no duty to defend the insured under a "claims made" policy against a complaint arising after the policy period ended, notwithstanding the second insurer's assertion that the complaint was related to a claim arising during the first insurer's initial period of coverage. The court, noting that this argument would "stretch the tail" of the first insurer's policy to include a claim made against the insured during the second policy period, rejected the argument because "lengthening the policy tail . . . is the very thing 'claims made' coverage exists to prevent." (Id. at p. 1305.) The court held the definition of "claim" in the first policy ("claims arising out of the same act or out of a series of interrelated acts shall be . . . treated as a single claim") remained subordinate to, and did not vary, the requirement in the policy that the first insurer agreed to pay for loss from claims made against the insured "during the policy period," and to be covered by the policy, a claim--or a group or series of claims "treated as a single claim"--still had to have been made during the policy period. (Id. at pp. 1303-1306.)