As everyone involved in D&O insurance claims knows, there are a number of frequently recurring coverage issues. But while many coverage issues often recur, the applicable legal principles continue to develop and change. There are resources (such as, for example, this blog) where important developments can be tracked, but sometimes what is called for is a single resource that collects the relevant developments in a single place. Fortunately for D&O insurance practitioners, there is resource that does just that. It is the “Directors & Officers Liability Insurance Deskbook” (about which refer here), an American Bar Association publication written by attorneys from the Clyde & Co. law firm and edited by Martin J. O’Leary of Clyde & Co. The book’s recently published Fifth 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 issues will welcome this updated edition.
The latest edition is organized by topic, with separate chapters addressing policy issuance issues; the insuring agreements; coverage triggers; defense obligations; and policy terms and conditions (including an extensive chapter on policy exclusions). There are also chapters discussing the topics of settlement, allocation, policy termination and nonrenewal issues, and insurance coverage litigation. The volume concludes with an interesting and helpful chapter on bankruptcy issues in coverage litigation.
Each chapter begins with a brief overview of the relevant principles applicable to the substantive area under consideration, and then follows with short summaries of relevant recent case decisions. The case summaries are succinct and provide helpful illustrations of the ways in which the courts have interpreted and applied the relevant principles. The examples selected usefully illustrate the general rules, and also explain how policy language differences or other considerations contributed to case outcomes. Where there is a range of authorities, the case summaries reliably provide a range of examples to illustrate the different outcomes.
For example, in discussing the breach of contract and the “antitrust” exclusions, the relevant chapter sections provide examples of both the broad interpretation of the exclusions and the narrow interpretation; the examples help explain the varying results.
Some readers will undoubtedly note that the insurer-oriented inclination of some of the book’s features, which arguably is no surprise given the authors’ typical role in the D&O claims process. For example, a subsection in the chapter discussing claim notice issues is 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 of this blog know that late notice issues are something of a hot button issue for me. A more neutral approach to the notice prejudice issue might caption the topic as “Whether an Insurer Must Demonstrate Prejudice for Failure to Comply with Policy Notice Provisions is a Matter of State Law.”
While the book is quite comprehensive, there are some recent high-profile developments that may require added sections to future editions of this book. For example, in light of recent case law developments in Delaware (such as for example, the Delaware Supreme Court’s recent decision in the Dole Foods case, discussed here), a choice of law section may been to be added to the Coverage Litigation Issues Chapter, as the courts’ rulings on the choice of law issues increasingly has become outcome determinative.
Notwithstanding its occasional insurer-oriented perspective, this book will be a useful tool for anyone involved in D&O insurance claims whether they are on the insurer side or the policyholder side. The book’s description of itself as a “Deskbook” is an apt characterization. The book is not intended to provide an exhaustive review of each of the topics addressed. Rather, it is intended to provide a quick overview of the topics, in order to allow readers to quickly acquaint themselves with the considerations involved. I recommend this resource as a quick reference guide. I am sure all D&O insurance practitioners would be glad to have this book handy when coverage questions arise.