You know that the Insured vs. Insured Exclusion is a frequent source of D&O insurance coverage disputes when on consecutive days two federal appellate courts issue opinions interpreting and applying the provision. As I noted yesterday, on January 10, 2017, it was the Ninth Circuit’s turn; the next day, it was the Eighth Circuit’s turn. On January 11, 2017, the Eighth Circuit affirmed a district court’s holding that the Insured vs. Insured exclusion in a grocery store chain’s D&O insurance policy precluded coverage for claims brought by the chain’s founder’s daughter, who had served briefly as a director of the company. The appellate court also affirmed the district court’s holding that the exclusion precluded coverage not just for the daughter’s claims, but also for the claims of her two children, who were shareholders but not directors of the company. The court, applying Minnesota law, held that the exclusion precluded coverage for both the claims of the daughter (who was an insured person) and those of the children (who were not). The Eighth Circuit’s opinion can be found here.
Continue Reading Eighth Circuit: Insured vs. Insured Exclusion Precludes Coverage for Claims Brought by Both Insured and Non-Insured Persons