Those of us involved in the world of D&O liability insurance are well aware that the coverage issues often are technical and the relevant legal principles can change quickly as a result of evolving case law. It would be valuable for practitioners in this area to have access to a reliable resource where the key principles are described and where the key case law authority can quickly be located. Fortunately, there is such a resource. It is the “Directors & Officers Liability Deskbook” (about which refer here), an American Bar Association publication written and edited by attorneys from the Sedgwick law firm. The book’s recently published Fourth Edition is a timely update. Every D&O liability insurance practitioner and indeed anyone looking for a quick and ready resource on D&O liability insurance coverage issuers will welcome this updated edition.
The latest edition is helpfully organized by topic, with sections running from policy issuance issues, through the insuring agreements, coverage triggers, policy terms and conditions, and including sections on the topics of settlement, allocation, policy termination and nonrenewal issues, and insurance coverage litigation. The volume concludes with an interesting and helpful chapter on UK and European coverage issues, written by Ed Smerdon and Tristan Hall of Sedgwick’s London office.
Each chapter begins with a brief overview of the relevant principles applicable to the substantive area under consideration, and then follows with quick summaries of relevant recent case decisions. The case descriptions are succinct and provide helpful illustrations of the ways in which the courts have interpreted and applied the relevant principles. In general, the examples selected usefully illustrate the general rules, as well as explain the policy language differences or other considerations that explain different case outcomes. Where there is a range of authorities, the case samples reliably provide a range of examples to illustrate the different outcomes.
For example, in discussing the breach of contract exclusion, the relevant chapter provides examples of both the broad interpretation of the exclusion and the narrow interpretation; the examples selected help provide insight into what might explain the different outcomes.
Unsurprisingly, given the book’s authors and their place in the process, the book sometimes reflects more of an insurer-oriented perspective. For example, in talking about claims notification issues, the relevant chapter has a subsection captioned “An Insurer Generally Need Not Demonstrate Prejudice to Deny Coverage for Failure to Comply with Provisions of the Policy Requiring Notice within the Policy Period.” Regular readers know that notice issues generally, and considerations involving the notice prejudice rule in particular, are hot button issues for me. Were I to edit the caption, I would re-phrase it to say that “Insurers can be relied upon to try to argue that an insurer generally need not demonstrate prejudice to deny coverage for failure to comply with provisions of the policy requiring notice within the policy; however, courts have in fact recognized a number of exceptions to these supposed general rules, and the generalization is in fact entirely inapplicable in the increasing numbers of jurisdictions where the notice prejudice rule applies.”
Notwithstanding the book’s occasional insurer-oriented perspective, this book will be a useful tool for anyone involved in D&O insurance, regardless of whether they are on the insurer side or the policyholder side. The book refers to itself as a “Deskbook” and that is an apt description of the book’s approach. The book is not intended to provide a comprehensive review of each of the topics addressed. Rather, this slim yet thorough book is intended to provide a quick overview of the topics, in order to allow readers to quickly acquaint themselves with the considerations involved with a topic. I recommend this resource as a quick reference guide. I am sure all D&O insurance practitioners would be glad to have this book at hand when issues arise.