D & O Insurance

Subscribe to D & O Insurance

A frequently recurring D&O insurance coverage question is whether the insurance policy provides insurance against claimed damages that are restitutionary in nature. The argument against coverage is under a public policy principle that the insured persons should not be able to obtain insurance protection against the return of so-called ill-gotten gains. This question was considered again in a recent insurance coverage decision out of a Connecticut trial court. In a decision that apparently is one of first impression in Connecticut, the court held both that the policy’s uninsurability clause and the policy’s personal benefit exclusion precluded coverage for the amount of a stipulated judgment in the underlying action. A copy of the Connecticut court’s August 23, 2024, opinion can be found here.Continue Reading Ct. Court Holds Restitutionary Damages Uninsurable

Sometimes seemingly subtle policy wording differences can significantly affect the court’s analysis of key policy clauses. The significance of the wording subtleties sometimes is best seen by comparing the wording to equivalent provisions in different policies. That was the case in recent proceedings in which an excess insurer sought to compel arbitration of an underlying coverage dispute. As discussed below, the court found that the language of the specific arbitration provision in dispute did not apply either to the parties or the dispute involved in the underlying coverage lawsuit. The ruling, in which the court applied New York law, can be found here.Continue Reading Insurer Cannot Compel Arbitration in Reliance on Narrow Arb Clause Wording

Daniele Favalli
Alessio Zolpi

In the following guest post, Daniele Favalli and Alessio Zolpi take a look at the availability of D&O insurance in connection with criminal proceedings in Switzerland. Daniele is an attorney admitted to the Zurich bar. He is a partner and co-head of the Dispute Resolution Team of the Zurich-based law firm VISCHER. Alessio is an attorney admitted to the Zurich bar and an associate in the Dispute Resolution Team at VISCHER. I would like to thank Daniele and Alessio for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Daniele and Alessio’s article.Continue Reading Guest Post: Switzerland: D&O Coverage Following Criminal Investigations

Readers may have seen the news this past week that WTW has filed an appeal to the Fourth Circuit of the district court’s holding that the bump-up exclusion in its D&O insurance policy precludes coverage for the settlement of the post-closing lawsuit filed  the company’s merger with Towers Watson. This appeal is in fact the second time this coverage lawsuit has made its way to the Fourth Circuit. This appeal will be closely watched not only because of the parties involved, but also because, as discussed in a recent memo from the Cooley law firm, issues surrounding the bump-up exclusion increasingly have been the source of litigated coverage disputes, and indeed questions concerning the exclusion are increasingly common. For reasons discussed below, I think there are important issues about this exclusion that the D&O insurance industry should be discussing.Continue Reading The Bump-Up Exclusion and Coverage for Post-Close M&A Lawsuits

D&O insurance provides coverage for individuals to the extent they are acting in their capacities as directors and officers of their companies. The policies do not provide coverage when the individuals are acting in other capacities. A recent decision from a New Jersey appellate court highlights the coverage questions that can arise when individuals are alleged to be acting in multiple capacities. The court concluded that coverage was entirely precluded for an individual who was acting multiple capacities. As discussed below, the decision raises interesting questions. Continue Reading D&O Insurance Coverage Precluded for Individual Acting in Dual Capacities

In a recent decision, an intermediate California appellate court affirmed a trial court’s holding that the professional services exclusion in a healthcare records software provider’s D&O insurance policy precludes coverage for the company’s $118.6 million settlement with the U.S. Department of Justice (DOJ) of kickback payment allegations. As discussed below, the appellate court’s decision raises questions about the appropriate wording for professional services exclusions in D&O insurance policies. A copy of the court’s June 21, 2024, opinion can be found here. Geoffrey Fehling’s July 2, 2024, post in the Hunton Andrews Kurth law firm’s Legal Updates blog about the court’s decision can be found here.Continue Reading Professional Services Exclusion Bars D&O Coverage for $118 Million DOJ Settlement

Sarah Abrams

As I noted in a post at the time (here), last Thursday, the U.S. Supreme Court issued its decision in SEC v. Jarkesy, striking down the SEC’s use of in-house courts in enforcement actions seeking monetary penalties. Then on Friday, the Court issued its decision in Loper Bright Enterprises v. Raimondo, in which the court wiped out the so-called Chevron doctrine, in which courts deferred to agency interpretations of ambiguous statutes. In the following guest post, Sarah Abrams, Head of Claims, Baleen Specialty, a division of Bowhead Specialty Underwriters, takes a look at these two decisions and examines some of the decisions’ implications from a D&O insurance perspective. I would like to thank Sarah for allowing me to publish her article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.Continue Reading Guest Post: Regulatory Coverage Impact on D&O Insurers Post-US Supreme Court Decisions in Jarkesy and Loper

Regular readers know that a recurring topic on this site is the question of the proper scope of the contractual liability exclusion found in many professional liability and management liability insurance policies. In prior posts I have argued that insurers sometimes apply the exclusion over-broadly so as to exclude matters I believe should otherwise be covered under the policy. 

A recent Second Circuit, applying New York law, again examined the scope of the contractual liability exclusion’s preclusive effect, rejecting a policyholder’s claim that the exclusion did not apply to an underlying declaratory judgment claim,  one of several claims asserted against the company in the underlying action. Although I often disagree with courts’ conclusions about the reach of the contractual liability exclusion, in this case the appellate court appears to have gotten it right, given the policy language at issue, in affirming the district court’s exclusion precludes coverage for the declaratory judgment claim. A copy of the Second Circuit’s June 17, 2024, opinion can be found here. (Hat tip to Paul Curley of the Kaufman Borgeest & Ryan law firm, for his June 21, 2024 LinkedIn post, here, about the decision.)Continue Reading Contractual Liability Exclusion Precludes Coverage for Declaratory Judgment Claim

Peter C. Fischer
Burkhard Fassbach

In the following guest post, Peter C. Fischer and Burkhard Fassbach explore the reasons why board members of German companies would be well-advised to negotiate a clause in their service agreements requiring their companies to procure D&O insurance, as well as the preferred terms and provisions that the D&O insurance should incorporate. Peter is a Professor of Law at the University of Applied Sciences Dusseldorf and Burkhard is a D&O lawyer in private practice in Germany. A version of this article in German previously was published in the law journal GWR. I would like to thank Burkhard and Peter for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.Continue Reading Guest Post: The German D&O Procurement Clause Revisited