It is a standard D&O insurance policy feature that if two claims are “related” within the meaning of the policy then they are “deemed” a single claim first made at the time of the earlier claim. However, in a recent coverage dispute, a Delaware court held, in reliance on policy language the court found to be clear and unambiguous, that two related claims were deemed first made not at the time the earlier claim but rather during the policy period of the policy in force at the time the later claim was made. Confused? Read on!

Continue Reading Two Claims Related But Deemed Made During the Later Claim’s Policy Period

In an interesting decision that explores the standard to be used in determining whether an earlier claim and a later claim are interrelated, the Delaware Supreme Court has affirmed a lower court ruling that a later filed opt-out action is related to a securities lawsuit earlier filed against First Solar, and therefore that the opt-out action is not covered under the D&O insurance program in place at the time the opt-out action was filed. Interestingly, the Supreme Court affirmed the lower court even though the appellate court held that the lower court had erroneously applied a “fundamentally identical” standard to the relatedness question rather than the relatedness standard defined by the policies. The Delaware Supreme Court’s March 16, 2022 opinion can be found here.
Continue Reading Del. Supreme Court: Opt-Out Action “Related” to Securities Class Action, Precluding Coverage

As I have noted in earlier posts, questions of whether or not two sets of circumstances are interrelated for purposes of determining insurance coverage can be vexing; at a minimum, they are always fact-intense. In a recent decision, the Tenth Circuit examined the question of whether or not a later civil lawsuit was interrelated with an earlier SEC investigation, and therefore deemed first made at the earlier date (prior to the policy period). The appellate court affirmed the district court’s conclusion that the lawsuit was interrelated with the investigation, precluding coverage for the claim. As discussed below, while the appellate court’s conclusion arguably is unremarkable, it still does highlight the elusive problems involved with relatedness issues. The Tenth Circuit’s September 10, 2018 decision in the case can be found here.
Continue Reading Tenth Circuit: Later Lawsuit Interrelated with Earlier SEC Investigation