As I noted in a prior post (here), Delaware’s legislature recently enacted a new legislation to permit Delaware corporations to put captive insurance in place as an alternative to traditional D&O insurance. In the following guest post, Richard Porter, Head of Financial Lines, Chubb Bermuda, Jarrod Schlesinger, Head of Public Company Management Liability, Chubb N.A. Financial Lines, and Dan Bailey, Member of Bailey Cavalieri LLC, take a look at the Delaware captive legislation and raise a number of concerns about the new law. A version of this article was previously published by Chubb on its website and can be accessed here. I would like to thank the authors 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 the authors’ article.
Continue Reading Guest Post: Proceed with Caution: Concerns About Delaware’s New Captive Statute

In a development that has set the D&O insurance industry commentariat abuzz, on January 27, 2022, the Delaware General Assembly passed Senate Bill No. 203, which amends the Delaware General Corporation Law (DGCL) to permit Delaware corporations to put captive insurance in place as an alternative to traditional D&O insurance. The legislation awaits the signature of Delaware Governor John Carney, who reportedly has already said he will sign it. As discussed below, the legislation has several interesting features, but the more interesting question is what the practical impact of the legislation will be.
Continue Reading Delaware Legislature Passes Bill Allowing Use of Captives for D&O Insurance

In the following guest, Yaminah Williams, Assistant Vice President, Hiscox USA, Alicia Garcia, Claims Counsel, Hiscox USA, Katherine Hausmann, Senior Complex Claims Specialist, Hiscox USA, Elan Kandel, Member, Bailey Cavalieri LLC and James Talbert, Associate, Bailey Cavalieri LLC, review the key 2001 D&O insurance coverage decisions. I would like to thank the authors 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 the authors’ article.
Continue Reading Guest Post: The Year in Review: 2021 Key D&O Insurance Coverage Decisions

Readers of this blog will be interested to know that in a recent D&O insurance coverage dispute, the Delaware Superior Court actually handed the D&O insurers a win — a rare development indeed in Delaware’s courts. However, the D&O insurers won by successfully arguing that Delaware law governed the insurance dispute; the ultimate outcome may have been due in part to the fact that the losing policyholder was in the uncomfortable position of trying to argue that another jurisdiction’s law controlled after all after having first argued that Delaware law applied. There are a lot of twists and turns to this case, but, as discussed below, the outcome of this case arguably is far from reassuring to D&O insurers, even though the insurers prevailed in this case.
Continue Reading Rare D&O Insurer Win in Delaware Court, But Should D&O Insurers Celebrate?

The Insured vs. Insured exclusion is one of the standard exclusions in D&O insurance policies (although these days at least in public company D&O insurance policies, the exclusion is framed as an Entity vs. Insured exclusion). Disputes often arise with respect to the Insured vs. Insured exclusion. In the following guest post, Ivan Rodriguez, Underwriting Lead with CelerityPro, Elan Kandel, Member, Bailey Cavalieri LLC and James Talbert, Associate, Bailey Cavalieri LLC, take a look at a situation that frequently results in Insured vs. Insured coverage disputes – that is, so-called “mixed” actions, in which the plaintiffs include both insured and uninsured persons. I would like to thank the authors 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 the authors’ article.
Continue Reading Guest Post: Divergent Trends Regarding Application of the Insured vs. Insured Exclusion for Mixed Actions

Barry Buchman
Michael Scanlon

As I have noted in prior posts on this site (most recently here), the so-called “bump up” exclusion in D&O insurance policies is a frequent source of coverage litigation between D&O insurance policyholders and their insurers. The “bump up” exclusion precludes coverage for increased amounts participants in an M&A transaction agree to pay in the transaction in order to settle a M&A-related lawsuit. In the following guests post, Barry Buchman and Michael Scanlon take a look at the issues that can arise in disputes over the application of the “bump up” exclusion and consider the practical consequences. Barry is partner and Michael is counsel in the insurance recovery group at the Haynes and Boone law firm. I would like to thank Barry and Michael 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 the authors’ article.
Continue Reading Guest Post: Avoiding Bumps in the Road to Coverage: Limitations on the “Bump-Up Exclusion”

I hope all of you already know this, for just in case and for those of you who do not, registration is now open for the 2022 PLUS D&O Symposium, which will be held March 1-2, 2022, at the Marriott Marquis in New York. The event will held live this year. I have already registered and I hope many of you will also register and attend the event. It will be so great to see everyone again! To register and for other information, please refer here.
Continue Reading PLUS D&O Symposium March 1-2, 2022 in New York

In a November 30, 2021 opinion (here), a Delaware Superior Court judge, applying Delaware law, held that the later investigations of the insured policyholder by two regulatory agencies were unrelated to an earlier investigation of the company by one of the agencies. In making this “relatedness” determination, the court declined to apply the “fundamentally identical” standard that some Delaware courts have applied to relatedness issues, but instead applied a “meaningful linkage” test. Because relatedness disputes are so frequent, and because Delaware’s court increasingly are becoming the forum in which insurance disputes are addressed, this court’s adoption of the revised relatedness standard court have important implications.
Continue Reading D&O Insurance: Delaware Court Applied “Meaningful Linkage” Interrelated Claims Test

Sarah Abrams

In the following guest post, Sarah Abrams, Head of PL Claims at Bowhead Specialty Underwriters, takes a look at the D&O insurance underwriting and claims implications of private equity investment in managed care organizations. 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.
Continue Reading Guest Post: PE Investment in Healthcare and Impact to Managed Care Organization D&O

Several years ago, when it became clear that plaintiffs’ lawyers were going to file merger objection lawsuits in connection with essentially every M&A transaction, the D&O insurers responded by adding a separate, larger retention for M&A-related claims. The larger M&A-related claim retention quickly became pretty much a standard feature of public company D&O insurance policies. However, because the M&A claim retention is in many instances substantially larger than the retention that would otherwise apply, the question of whether the larger retention applies to a particular claim can be a significant one. In a recent case, the Delaware Superior Court addressed a D&O insurance coverage dispute in which, among other things, the insurers and the policyholder disagreed on whether the larger M&A-related claim retention applied to the underlying litigation. In an interesting November 23, 2021 opinion (here), Delaware Superior Court Judge Eric Davis held that the larger M&A retention did not apply.
Continue Reading Court Holds Larger M&A-Related Retention Does Not Apply to Securities Claim