The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Category Archives: D & O Insurance

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D&O Insurance: Eleventh Circuit Holds Insured v. Insured Exclusion’s Applicability to FDIC Failed Bank Claims Ambiguous

Posted in D & O Insurance
Going all the way back to the S&L crisis, a recurring insurance coverage issue that has arisen in the failed bank context has been the question of whether or not coverage for a claim brought by the FDIC in its capacity as receiver of a failed bank against the failed bank’s former directors and officers … Continue Reading

Q&A with PLUS1 Award Winner Aruno Rajaratnam

Posted in D & O Insurance
On Thursday November 6, 2014, at the Professional Liability Underwriting Society (PLUS) International Conference in Las Vegas, the PLUS1 Award will be conferred on my good friend, Aruno Rajaratnam. The PLUS1 Award is presented annually to a person “whose efforts have contributed substantially to the advancement and image of the professional liability industry.” I can’t … Continue Reading

D&O Insurance: Contractual Liability Exclusion Precludes Coverage for Negligent Misrepresentation Claims

Posted in D & O Insurance
In an October 20, 201 opinion (here), Middle District of Florida Judge Roy B. Dalton, Jr., applying Florida law, entered summary judgment for a D&O insurer, holding that the insurer was not liable for the stipulated judgment its insured had entered because the policy’s broad contractual liability exclusion precluded coverage for the underlying claims of … Continue Reading

D&O Insurance: Insured vs. Insured Exclusion Applicability to FDIC Failed Bank Claim Held Ambiguous

Posted in D & O Insurance
As I have previously noted on this blog, one of the recurring D&O insurance coverage issues arising during the latest bank failure wave has been the question whether the Insured  vs. Insured Exclusion precludes coverage for claims brought by the FDIC in its capacity as receiver for a failed bank against the failed bank’s former … Continue Reading

D&O Insurance: Prior and Pending Litigation Exclusion Bars Coverage for Lawsuit Filed Years Before But Served During the Current Policy Period

Posted in D & O Insurance
Under which claims made D&O insurance policy is there coverage for a claim that was filed under seal years ago but not served on the policyholder until the policy period of the current policy? If you find the answer “no policy” as unsatisfying as I do, read on. In a September 15, 2014 opinion (here), … Continue Reading

D&O Insurance: Though Specific Litigation Exclusion Does Not Apply, Subsequent Suits Related to Prior Claim Not Covered

Posted in D & O Insurance
As the litigation wave arrived following the global financial crisis, many financial institutions were hit with multiple suits that arrived piecemeal and over time. For D&O insurance coverage purposes, these lawsuits were filed across multiple policy periods. A recurring question as the subprime litigation has worked its way through the system is whether the various … Continue Reading

Bankruptcy Court: D&O Insurance Available for MF Global Executives’ Defense, Without Restriction

Posted in D & O Insurance
On September 4, 2014, in the latest in a series of rulings on the issue of whether MF Global’s D&O insurers may pay the defense expenses the company’s former officers and directors are incurring in the various lawsuits pending against them, Southern District of New York Bankruptcy Judge Martin Glenn held that the insurers may … Continue Reading

Montana Supreme Court: Not Necessary to Consider Underlying Allegations or Policy Terms to Determine Insurer’s Defense Duty

Posted in D & O Insurance
As part of our beat here at The D&O Diary, we read a lot of judicial opinions. We like nothing better than to read an appellate opinion where a dissenting justice and the majority really mix thing up. For that reason alone, we read the recent insurance coverage decision out of the Montana Supreme Court … Continue Reading

Professional Liability Insurance: Application Misrepresentation Precludes Coverage for Legal Malpractice Claim

Posted in D & O Insurance
In a July 31, 2014 opinion (here), Central District of California Judge Fernando M. Olguin, applying California law, granted a professional liability insurer’s motion for summary judgment in a coverage lawsuit brought by the Blum Collins LLP law firm and Craig M. Collins dba the Collins Law Firm for breach Judge Olguin agreed that because … Continue Reading

Despite Policyholder’s Delayed Notice, Insurer Must Cover Subsequent Claims Related to Earlier Timely Claim

Posted in D & O Insurance
On July 16, 2014, the Eighth Circuit, applying New York law, concluded that because a financial services firm’s professional liability insurance policy was ambiguous on the question whether the policy’s timely notice requirements apply to later claims related to a timely original claim, the policy provides coverage for the later claims. The district court had … Continue Reading

D&O Insurance: FDIC’s Claims Against Failed Bank’s Directors and Officers Not Related to Earlier Claims, Trigger Separate Policy Period

Posted in D & O Insurance
On July 9, 2014, in yet another in the ever growing line of cases examining whether or not separate D&O claims involving interrelated wrongful acts, District of Puerto Rico Judge Gustavo Gelpi, applying Puerto Rico law, held that the FDIC’s claims against the former directors and officers of the failed Westernbank did not involve the … Continue Reading

Court Holds Professional Liability Insurance Covers Restitutionary Settlement

Posted in D & O Insurance
On July 3, 2014, in an interesting decision that is sure to stir up much discussion and controversy, District of Minnesota Judge Paul Magnuson, applying Delaware law, held that U.S. Bank was entitled to coverage under its professional liability insurance for restitutionary amounts it paid in settlement of an overdraft fee overcharge class action. The … Continue Reading

D&O Insurance: Excess Insurance Not Triggered Due to Insolvency of Underlying Insurer and Due to Insufficient Loss

Posted in D & O Insurance
In a long and convoluted opinion befitting the long and convoluted case in which it was entered, Judge David Grine of the Pennsylvania (Centre Country) Court of Common Pleas, applying Pennsylvania law, entered summary judgment for an excess D&O insurer, holding that the excess insurer’s payment obligation had not been triggered due to the insolvency … Continue Reading

D&O Insurance: Liberalization Endorsement Allows Insureds to Rely on New Policy Form’s Enhanced Insured vs. Insured Exclusion Carve-Back

Posted in D & O Insurance
On June 19, 2014, in a case involving so many unusual coverage issues that it seems more like a law school exam question than an actual coverage dispute, New York (New York County) Supreme Court Judge Melvin Schweitzer, applying New York law, granted summary judgment for the former directors of the bankrupt Lyondell Chemical Company … Continue Reading

Insurance Coverage: Six-Month Delay in Providing Notice Not “As Soon as Practicable”

Posted in D & O Insurance
Has notice of claim been provided “as soon as practicable” if it is sent to the insurer during the policy period but six months after service on the insured of the underlying complaint? Apparently not, at least according to a June 6, 2014 opinion of a New Jersey intermediate appellate court, applying New Jersey law. In addition, … Continue Reading

D&O Insurance: Later Securities Suit and Prior FDIC Failed Bank Claim Held Unrelated, Securities Suit Not Covered

Posted in D & O Insurance
On May 8, 2014, Southern District of New York Judge Deborah Batts, applying New York law, held that a there was not a sufficient “factual nexus” between a securities suit filed after the expiration of a failed bank’s D&O insurance policy and an FDIC claim that had been first made during the policy period and … Continue Reading

D&O Insurance: New York Appellate Court Refuses Dismissal for Insurer that Raised Late Notice Defense

Posted in D & O Insurance
A New York appellate court, applying New York law, has rejected a D&O insurer’s argument based on alleged late notice of claim that it had no coverage obligations for amounts Sirius XM Radio  had incurred in underlying litigation, holding that the insurer’s policy was ambiguous on the timeliness requirements for notice of interrelated claims. A … Continue Reading

D&O Insurance: Delaware Supreme Court Rules WaMu Liquidating Trust Coverage Suit Not Yet Ripe

Posted in D & O Insurance
In a May 28, 2014 opinion (here), the Delaware Supreme Court held that an action by the bankrupt Washington Mutual bank holding company’s liquidating trust seeking a judicial declaration of coverage under the bank’s D&O insurance program for claims asserted by the trust against the failed bank’s directors and officers must be dismissed on ripeness … Continue Reading

Management Liability Insurance: Broad Professional Services Exclusion Precludes Coverage for Securities and Mismanagement Claims

Posted in D & O Insurance
On May 15, 2014, in an interesting decision illustrating how complex insurance contract wordings can interact to produce outcomes policyholders may not have expected or intended, District of Columbia Superior Court Judge Frederick H. Weisberg held that as worded a broad professional services exclusion in The Carlyle Group’s management liability insurance policy precluded coverage for … Continue Reading

Lender Liability Coverage: Contractual Liability Exclusion Does Not Preclude Coverage for Interrelated Claim

Posted in D & O Insurance
In a March 20, 2014 decision involving interpretation of the interrelated wrongful acts provision and of the contractual liability exclusion in a bank professional liability insurance policy, District of Idaho Magistrate Judge Ronald E. Bush entered summary judgment on behalf of the policyholder, ruling that the underlying dispute was covered under the policy’s lender liability … Continue Reading