D & O Insurance

Subscribe to D & O Insurance via RSS

Whether or not two or more claims are interrelated within the meaning of a D&O insurance policy is a recurring issue. The outcome of interrelatedness disputes often reflects the specific facts involved and the relevant policy language. In addition, the applicable law can also be a factor. A recent decision of the Delaware Superior Court reflects all these factors, and the case outcome at least raises the question whether the applicability of New York law to the dispute was determinative. The Court’s opinion, as updated and reissued on January 6, 2025, can be found here.Continue Reading Delaware Court, Applying NY Law, Addresses Related Claims Dispute

One of the recurring D&O insurance coverage issues is whether or not the so-called “bump-up” exclusion precludes coverage for amounts paid in settlement of post-merger litigation. The outcome of these disputes is often a reflection of several situation-specific factors, including the specific policy language involved, the nature of the underlying transaction, the claims alleged in the underlying litigation, the features of the settlement, and the applicable law. All of these factors came into play in a recent Delaware Superior Court decision in which the court held that the primary policy’s bump-up exclusion does not preclude coverage for the settlement of the lawsuit relating to the 2017 merger of Harman International Industries and Samsung’s American division. The court’s January 3, 2025 opinion, as amended in a January 7, 2025 corrected opinion, can be found here.Continue Reading Del. Court: Bump Up Exclusion Doesn’t Bar Coverage for Post-Merger Suit Settlement

Is a company’s action against a corporate executive to recover the costs of defense the company advanced on his behalf “restitutionary” in nature and are the amounts involved therefore precluded from coverage under the D&O insurance policy’s definition of Loss? In an opinion that undoubtedly will gladden the hearts of policyholder-side advocates, a California appellate court held that it is not. As discussed below, there are a number of interesting features to the court’s opinion. The California Court of Appeals’ November 12, 2024 opinion can be found here.Continue Reading CA Court: Suit to Recover Executive’s Defense Fees not “Restitutionary”

Alex Hopkins

In a guest post published on this site in October 2023 (here), Jane Njavro of Woodruff Sawyer took a look at the perennial issues surrounding the structure of D&O insurance for foreign subsidiaries of domestic U.S. companies. In the following guest post, Alex Hopkins, AVP & Counsel, Travelers Bond & Specialty Insurance, takes a further look at these issues and reviews the compliance, coverage, and claims management considerations involved. I would like to thank Alex for allowing me to publish his article 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 Alex’s article.Continue Reading Guest Post: Managing D&O Compliance, Coverage, and Claims Beyond U.S. Borders

Many private company D&O insurance policies have a so-called antitrust exclusions that precludes coverage for claims alleging violations of the antitrust laws. However, these exclusions are written broadly and often seek to preclude a wide range of kinds of claims, beyond just claims alleging violations of the antitrust laws. A recent case from the Eastern…

Standard D&O insurance policies typically include an exclusion precluding coverage for claims brought by one insured against another insured. This exclusion also typically has a carve-back to the exclusion preserving coverage claims brought by bankruptcy officials, such as a trustee or received. One recurring question is whether or not a claim brought against an insured person by the company acting as debtor-in-possession is precluded by the exclusion, or whether the bankruptcy carve-back preserves coverage for the claim.

In an interesting October 3, 2024, decision, a bankruptcy court judge presiding over the Chapter 11 bankruptcy of Walker County Hospital Corporation, and applying Texas law, held that a claim by the Hospital acting as debtor-in-possession against the Hospital’s former CEO fell within the bankruptcy carve-back, and therefore that the insured vs. insured exclusion did not preclude coverage. The court’s analysis of this recurring question is interesting, as discussed below. A copy of the bankruptcy court’s October 3, 2024, opinion can be found here.Continue Reading Insured vs. Insured Exclusion Does Not Bar Coverage for Debtor-in-Possession’s Suit Against Former CEO

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