Archives: D & O Insurance

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What to Talk About When You Talk About D&O Insurance

Perhaps because of my many years in the D&O insurance business, I am frequently approached by younger insurance agency and insurance brokerage professionals who are thinking about trying to concentrate on D&O insurance as product specialty. I generally encourage this idea, as I think that D&O insurance is an interesting industry space that still provides … Continue Reading

Why Late Notice Cases Bother Me

Claims made insurance policies provide coverage for claims first made during the policy period. So if the claim is made during the policy period, there’s coverage, right? Not so fast; there’s a catch. Under most claims made policies, the claim also has to be reported during the policy period or within a short period after … Continue Reading

D&O Insurance: Company in Receivership, Insurer Can Advance Defense Expense, But Limits Exhausted?

An issue that frequently comes up when companies are in bankruptcy or in other forms of receivership is whether the companies’ D&O insurer can advance payment of individuals’ defense costs over the receiver’s objections. In a recent case, a Northern District of Texas judge has ruled that the individual defendants in an SEC enforcement action … Continue Reading

Ninth Circuit: Professional Services Exclusion Precludes D&O Insurance Coverage

A recurring issue under private company D&O insurance policies is the scope of the preclusive effect of the professional services exclusion. This question is particularly important for companies in professional services industries, as just about everything these kinds of companies do arises in some way out of their delivery professional services. In a June 4, … Continue Reading

D&O Insurance Coverage for Competitor Hire Claims

A frequently recurring claim that many companies face is a lawsuit brought by a competitor after the company hires the competitor’s former employee. Depending on how the competitor’s lawsuit is framed, these kinds of claims can be an awkward fit with the defendant company’s D&O insurance policy. A recent insurance coverage dispute in Delaware state … Continue Reading

Guest  Post: Plaintiffs Can Keep Their D&O Claims But They Cannot Touch The Insurance Proceeds

D&O insurance issues can be particularly difficult in the bankruptcy context. A number of issues can arise in the bankruptcy context that are not usually involved in ordinary claims circumstances. In the following guest post, Trinitee Green of the Bryan Cave Leighton Paisner law firm reviews and analyzes a particularly complicated set of circumstances that … Continue Reading

D&O Insurance: Special Event Exclusion Does Not Preclude Subsequent Litigation Coverage

As I have frequently noted, a recurring and vexing D&O insurance issue is the question of relatedness between different claims. Another frequent D&O insurance coverage issue is the question of the applicability of a special event or prior litigation exclusion. A recent Southern District of Indiana decision, applying Indiana law, addressed both of these issues … Continue Reading

Prior Acts Exclusion Does Not Preclude Coverage Where Subsequent Claim Independent from Alleged Prior Acts

In a January 23, 2018 unpublished decision (here), the Eleventh Circuit held that a D&O insurance policy’s prior acts exclusion does not preclude coverage where the subsequent claim against insured persons is “independent” from the alleged wrongful acts that occurred prior to the policy period. The appellate court’s opinion, in which it affirmed a district … Continue Reading

Second Circuit: Professional Services Exclusion Precludes D&O Coverage for NASDAQ’s Facebook IPO Claims

A recurring D&O insurance issue is the question of whether or not coverage for a particular claim is precluded under the relevant policy’s professional services exclusion. A recent decision by the Second Circuit addressed questions concerning the applicability of a professional services exclusion in a D&O insurance coverage dispute arising out of the mistake-plagued Facebook … Continue Reading

D&O Policy Rescission Upheld Despite Poorly Written Application Question and Arguably Correct Answer

Insurance policies are of course written documents, dependent upon standard conventions of grammar and usage in order to establish their meaning. A recent unpublished opinion from the Ninth Circuit wrestled with the grammar rules involved when an insurance application’s question and answer created a double negative. Even though a literal reading of the application question … Continue Reading

D&O Insurance: Coverage Carve-Backs in the Insured vs. Insured Exclusion

A standard exclusion found in most private company directors and officers insurance policies precludes coverage for claims brought by one insured against another insured – the so-called Insured vs. Insured exclusion. The exclusion typically includes several coverage carve-backs preserving coverage for certain types of claims for which the exclusion would otherwise preclude coverage. One relatively … Continue Reading

Claims Made Policies: The Problem of Pre-Policy Period Dispute Communications

Most professional liability insurance policies are written on a claims-made basis – that is, they cover only claims first made during the applicable policy period. A recurring issue under these kinds of policies is the question of when a claim was first made. This question can be particularly complicated if there were pre-policy period communications … Continue Reading

D&O Insurer’s Withholding of Settlement Consent Held Reasonable

D&O insurance policies typically specify that the insurer’s written consent is required for a policyholder to settle a claim, such consent not to be unreasonably withheld. This consent-to-settlement clause is the not infrequent source of coverage disputes, usually involving circumstances where the policyholder has gone ahead and settled a claim without seeking the requisite consent. … Continue Reading

D&O Insurance Coverage and the Rise of Appraisal Litigation

As I have detailed on this blog (most recently here), due to two Delaware court decisions — the Delaware Supreme Court’s 2015 decision in Corwin v. KKR Financial Holdings LLC  (here) and the Delaware Chancery Court’s January 2016 court decision in the In re Trulia Shareholder litigation (here)—deal litigation that in the past would have been filed in Delaware … Continue Reading

D&O Insurance and Insured Capacity

The insurance available under a D&O insurance policy does not protect insured individuals for all of their activities; rather, the policy protects the individuals only for their actions undertaken in their capacities as officer or directors of the insured organization. The policy does not protect the individuals for actions undertaken in their personal capacity or … Continue Reading

Ongoing SEC Investigation is a “Claim” Sufficient to Trigger Prior Claim Exclusion

In an insurance coverage dispute arising out of the high-profile and long-running SEC investigation of and enforcement action against the investment firm Patriarch Partners and its CEO Lynn Tilton, a federal district court judge has ruled that coverage under Patriarch’s excess D&O insurance policy is precluded under the policy’s “Pending and Prior Claim” exclusion, because … Continue Reading

D&O Insurer Must Continue Defense Expense Reimbursement Post-Merger

An acquired bank’s D&O insurer’s defense cost obligation to the bank’s directors and officers in connection with merger-related litigation continued after the merger transaction closed and was owed to the acquiring bank, a federal district court judge has held, rejecting the policy-based arguments on which the insurer relied to contend that its payment obligations ceased … Continue Reading
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