Among the terms and conditions typically found in a D&O insurance policy is the so-called “Insured vs. Insured” exclusion, which precludes coverage for claims brought by one insured against another insured. The exclusion often figures in D&O insurance coverage disputes, as I have frequently noted on this blog. While the exclusion broadly precludes coverage for an entire category of claims, the exclusion often also has exceptions that preserve coverage for certain types of claims that would otherwise be excluded.
In a recent case in the Northern District of California, a D&O insurance policyholder tried to argue that the underlying claim came within one of the standard coverage carve-backs typically found in this type of exclusion, a provision preserving coverage for derivative claims. In a September 26, 2016 order (here), Northern District of California Judge Haywood S. Gilliam, Jr., applying California law, held that the Insured vs. Insured Exclusion applied to preclude coverage and that the underlying lawsuit did not come within the coverage carve-back. The parties’ dispute and the court’s ruling provide a useful backdrop to think about the exclusion and alternative wordings that are sometimes available in the marketplace. Continue Reading Thinking About Exceptions and Alterations to the Insured vs. Insured Exclusion
One of the practical effects of the U.S. Supreme Court’s 2010 decision in Morrison v. National Australia Bank is that, as a result of the decision, it is more difficult to bring a class action in a U.S. court under the U.S. securities laws against a company based outside the U.S. The Court rejected earlier standards allowing U.S. courts to consider securities suits against non-U.S. companies if conduct relating to or effects of an alleged fraud took place in the U.S. Instead, the Court said that U.S. securities laws apply only to “transactions in securities listed on domestic exchanges, and domestic transactions in other securities.”
In order to try to resolve litigation pending against them, policyholders sometimes enter a settlement in which they agree to the entry of a consent judgment against them and to the assignment to the claimants of their rights under their insurance policy, subject to the claimants’ agreement not to execute the judgment against them. The question that often arises is whether, in light of the covenant not to execute, the policyholders have suffered a “Loss” as required to trigger policy coverage.
Cybersecurity has been and remains one of the hot topics in corporate governance. Several federal regulatory agencies, including the SEC, have 
As I noted in my 
One of defendants’ most significant arguments in opposing data breach victims’ negligence and breach of privacy claims has been that the claimants that have not suffered actual fraud or identity theft can show no cognizable injury and therefore lack Article III standing to assert their claims. Appellate decisions in the Seventh and Ninth Circuit have previously taken a bite out of this defense, in rulings holding that the victims’ fear of future harm is sufficient to establish standing. Now the Sixth Circuit in a case involving alleged victims of a data breach at Nationwide Mutual Insurance Company has joined these other circuits, holding that the claimants’ heightened risk for fraud and mitigation costs were sufficient to establish Article III standing. The Sixth Circuit’s September 12, 2016 opinion, which can be found 
The D&O Diary’s Asia Pacific tour ended last week with a final stop in Mumbai for meetings and for an educational event PLUS was co-sponsoring with the local management liability insurance education group, Bima Gyaan. I enjoyed the chance to be back in Mumbai. It is a vibrant, dynamic, fascinating place, a place that is experienced more vividly and more viscerally than more ordinary destinations. 
The D&O Diary’s swing through the Asia Pacific region continued last week with a short stop in Singapore. The same hot and steaming conditions that prevailed in Hong Kong were also in effect in Singapore, although because Singapore is only about 90 miles from the equator, the conditions were the same but more so. Singapore is a small, wealthy city state. Its geographic size is comparable to that of New York City, although Singapore’s population (about 5.8 million) is less than that of New York (about 8.9 million); Singapore’s population is larger than every U.S. city other than New York.