Archives: D & O Insurance

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Delaware Supreme Court: What is a “Securities Claim”?

Most public company D&O insurance policies provide coverage for the corporate entity only for “Securities Claims.” But what constitutes a “Securities Claim”? That is the question the Delaware Supreme Court addressed in a recent appeal of an insurance coverage dispute in which a bankruptcy trustee had sued Verizon for breach of fiduciary duty, unlawful payment … Continue Reading

Third Circuit Finds Major Shareholder Exclusion Ambiguous

D&O insurance policies sometimes contain Major Shareholder Exclusions, precluding coverage for claims brought by shareholders’ with ownership percentages above a certain specified ownership threshold. But when is the shareholder’s ownership percentage to be determined – at the time of policy inception or at the time of the claim? This issue was among the D&O insurance … Continue Reading

News Flash: Insurer That Paid Full Policy Limits Did not Breach the Policy or Act in Bad Faith

D&O insurance policyholders sometimes bridle when the insurers take steps to try to rein in burgeoning defense expense. In that situation, the D&O insurers will often try to remind the policyholder that because defense expense erodes the limit of liability, it is in everyone’s interest for defense expense to be monitored closely. An unusual coverage … Continue Reading

11th Circ.: Florida Public Policy Precludes Coverage for Voluntary Settlement of Criminal Charges

D&O insurance typically defines the term “Claim” to include criminal charges after indictment. However, the coverage available under the policy for criminal proceedings is excluded in the event of a final adjudication determining that precluded misconduct actually took place. But what happens to the coverage if there is no final adjudication but rather the criminal … Continue Reading

Guest Post: Delaware Court Ruling Creates New Wrinkle for Defendants Evaluating Appraisal Claims

As I discussed in a recent post, in July 2019, a Delaware Superior Court judge held that an appraisal action is a Securities Claim within the meaning of the applicable D&O insurance policy. While this part of the court’s ruling was noteworthy, there was another part of the court’s ruling that was also important. In … Continue Reading

In Odd Twist, Seventh Circuit Panel Reverses Itself on Prior Notice Ruling

In July, the Seventh Circuit issued a unanimous opinion in the case of Emmis Communications Corp. v. Illinois National Insurance Company, in which the court ruled that the policyholder’s provision of notice to the previous carrier precluded coverage for an underlying claim under the later of two D&O insurance policies. The court’s ruling was widely … Continue Reading

Ninth Circuit Certifies Consent to Settlement Question to Arizona Supreme Court

In an interesting development in a long-running legal battle in which for-profit education company Apollo Education Group is seeking D&O insurance coverage for its $13.125 million settlement of an options backdating-related securities class action lawsuit, the Ninth Circuit has certified to the Arizona Supreme Court the question of the standard of law to be applied … Continue Reading

The Fed Has a Message for Banks about D&O Insurance          

The Federal Reserve wants bank directors and senior executives  to know that while their D&O insurance policies are “an important risk mitigation tool,” their policies could contain exclusions that could “potentially limit coverage” and leave them without insurance in the event of a claim. In a July 23, 2019 letter (here), the Fed informed banks … Continue Reading

D&O Insurance: Del. Court Rejects Insurers’ Appraisal Action Coverage Defenses

As the number of shareholder appraisal lawsuits increased a few years ago, a recurring question has been whether or not a company’s D&O insurance covers the company’s costs incurred in defending an appraisal action. In a recent decision, a Delaware Superior Court judge rejected a number of the recurring coverage defenses on which insurers rely … Continue Reading

D&O Insurance: Specific Litigation Exclusion Does Not Preclude Coverage for Subsequent Securities Suit

In a recent decision, the Delaware Superior Court, applying Delaware law, held that two of Pfizer’s excess D&O insurers are on the hook for their portion of costs the company incurred in defending and settling a securities class action lawsuit, despite the excess insurers’ arguments that the claim was interrelated with an earlier securities suit … Continue Reading

Guest Post: Some Additional Thoughts on Easing Late Notice Consequences under Renewal Policies

In a recent post, I expressed a variety of opinions about claims notice issues arising in connection with D&O insurance renewals. Apparently, my commentary and proposals triggered enough of a reaction from my good friend John McCarrick that he felt compelled to write a response. John is a partner at the White & Williams law … Continue Reading

D&O Insurance: Prior Acts Exclusion Precludes Coverage for Post-Past Acts Date Conduct

In a noteworthy decision that raises a number of interesting issues, District of Minnesota Judge Ann D. Montgomery, applying Minnesota law, held that a company’s excess D&O insurance policy’s prior acts exclusion precludes coverage for the entirety of claims asserted against the company, even with respect to wrongful acts alleged to have taken place after … Continue Reading

D&O Insurance: Thinking About the Invasion of Privacy Exclusion

As the number of Telephone Consumer Protection Act (TCPA) class actions has risen in recent years, one recurring question has been whether or not there is coverage under the defendant companies’ D&O insurance policies for these claims.  The specific issue is whether or not D&O policy’s “invasion of privacy” exclusion precludes coverage for TCPA claims. … Continue Reading

Who is D&O Insurance For?

In an interesting opinion, the Fifth Circuit has set aside a settlement and related bar order that had been approved by the district court in litigation arising out of the Stanford Financial Ponzi scheme scandal. The appellate court said that the district court lacked authority to approve the settlement in light of several of its … Continue Reading

Thinking About the Differences Between Private Company and Public Company D&O Insurance

Privately-held companies, on the one hand, and companies whose shares are public traded, on the other hand, face very different liability exposures. Because of these differences in liability exposures, the directors and officers liability insurance available for these types of entities varies – the D&O insurance form available for private companies is quite a bit … Continue Reading

Del. Court Addresses Summary Judgement Issues in Dole Foods Take-Private Transaction Insurance Coverage Litigation

The long-running insurance coverage litigation arising from the settlements of the shareholder claims filed in connection with the Dole Food Company’s November 2013 “going private” transaction continues to work its way through the Delaware court. In the latest development in the coverage dispute, a Delaware Superior Court judge has entered two separate  interesting orders, the … Continue Reading

D&O Insurance: Warranty Exclusion Precludes Coverage Due to Application Misrepresentation

A federal district court has held that because of an insured company’s application misrepresentation about possible M&A activity, a D&O insurance policy’s Warranty Exclusion precludes coverage for the policyholder’s costs incurred in defending claims arising out of the insured company’s acquisition. The court’s opinion raises interesting questions about how the meaning of application questions is … Continue Reading

Late Notice Precludes Coverage for False Claims Act Settlement

When most people think of liability insurance, they think about the insurer’s payment obligations. But policyholders have obligations under liability insurance policies, too. Among the most important policyholder obligation is the requirement to provide timely notice of claim. The failure to provide timely notice can entirely preclude coverage, as is illustrated in a ruling in … Continue Reading
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