Tag Archives: insurance coverage

D&O Insurance: FDIC’s Claims Against Failed Bank’s Directors and Officers Not Related to Earlier Claims, Trigger Separate Policy Period

On July 9, 2014, in yet another in the ever growing line of cases examining whether or not separate D&O claims involving interrelated wrongful acts, District of Puerto Rico Judge Gustavo Gelpi, applying Puerto Rico law, held that the FDIC’s claims against the former directors and officers of the failed Westernbank did not involve the … Continue Reading

D&O Insurance: Excess Insurance Not Triggered Due to Insolvency of Underlying Insurer and Due to Insufficient Loss

In a long and convoluted opinion befitting the long and convoluted case in which it was entered, Judge David Grine of the Pennsylvania (Centre Country) Court of Common Pleas, applying Pennsylvania law, entered summary judgment for an excess D&O insurer, holding that the excess insurer’s payment obligation had not been triggered due to the insolvency … Continue Reading

Insurance Coverage: Six-Month Delay in Providing Notice Not “As Soon as Practicable”

Has notice of claim been provided “as soon as practicable” if it is sent to the insurer during the policy period but six months after service on the insured of the underlying complaint? Apparently not, at least according to a June 6, 2014 opinion of a New Jersey intermediate appellate court, applying New Jersey law. In addition, … Continue Reading

NY Court of Appeals Reverses Itself, Holds Insurer’s Breach of Duty to Defend Doesn’t Waive Coverage Defenses After All

In an unusual development in a closely watched case, K2 Investment Group, LLC v. American Guarantee & Liability Ins. Co., the New York Court of Appeals has reversed its own June 2013 ruling in the case in which it held that a legal malpractice insurer that breached its duty to defend is barred from relying … Continue Reading

Guest Post: Settlor Capacity v. Fiduciary Capacity — Does Wearing Two Hats Mean You May be Denied Coverage?

I am pleased to publish below a guest post from Rhonda Prussack, Executive Vice President and Product Manager, Fiduciary Liability, for Chartis, and her colleague at Chartis, Larry Fine, Global Head Professional Liability Claims, Financial Lines Claims. Rhonda’s and Larry’s guest post is written in response to a recent guest post on this blog about the … Continue Reading

Fidelity Insurance and the Timing of the Employer’s Responsibility for an Employee Defalcation

On August 1, 2011, in a 2-1 decision characterized by a testy but interesting exchange between the majority and the dissent, the Sixth Circuit held that a fidelity policy provided coverage for nearly one million dollars a bank employee stole from client brokerage accounts. For those who (like me) are not regularly involved in fidelity … Continue Reading

Guest Post: Internal Investigation Costs: How Investigations Coverage May Fail

One of the perennial D&O insurance issues is the question of coverage for investigative costs. Several recent cases have taken a close look at these recurring issues.  In the following guest post, my good friend Kara Altenbaumer-Price (pictured) examines recent developments in this area and the important factors that can affect the analysis. Kara is … Continue Reading

D&O Insurance: Meditations on the Meaning of “Relatedness”

Of all the questions surrounding liability insurance, the one issue that seemingly ought to be most obvious is the amount of insurance potentially available to respond to claims. Indeed, the question of the amount of insurance potentially available for a single claim usually is relatively straightforward and usually is answered by reference to the limit … Continue Reading

Eleventh Circuit: D&O Insurance Does Not Cover Office Depot’s Informal SEC Investigation Expenses

One of the highest profile D&O insurance coverage decisions last year was the district court’s October 2010 opinion  holding that Office Depot’s D&O insurance policy does not cover defense expenses the company incurred in responding to an informal SEC investigation. The company’s appeal of the district court’s decision has been closely watched. On October 13, … Continue Reading

D&O Insurance: What Happens When the Former CEO Sues the Company?

When an ex- Chairman, CEO and Director sues his former company, are the company’s defense expenses covered under its D&O insurance policy? According to the June 24, 2011 report and recommendation of Middle District of Tennessee Magistrate Judge John S. Bryant, applying Tennessee law, they are not. A copy of Magistrate Bryant’s report and recommendation … Continue Reading

D&O Insurance: Second Circuit Holds Investigative and Special Litigation Committee Expenses Covered

In a sweeping July 1, 2011 opinion in MBIA’s favor, the Second Circuit held that the company’s D&O insurance policies cover the investigative and special litigation expense the company incurred during a regulatory investigation of its accounting practices. This case had been closely watched in the D&O insurance community because of widespread carrier concerns over … Continue Reading

FDIC’s Receivership Rights Don’t Bar Fidelity Bond Rescission

The FDIC in its status as receiver of a failed bank may not avoid rescission of a fidelity bond procured by material misrepresentation, notwithstanding the FDIC’s statutory receiver rights, according to a June 7, 2010 Second Circuit decision. This decision represents an important interpretation of the FDIC’s statutory rights as receiver, and could prove to … Continue Reading

Bankruptcy and D&O Insurance

According to statistics compiled by the American Bankruptcy Institute, over 60,000 businesses filed for bankruptcy in 2009, the highest annual number of business-related bankruptcies since 1993. By way of comparison, the 2009 business bankruptcy filing levels were nearly 200% greater than in 2006. All signs are that these bankruptcy filing levels have continued unabated this … Continue Reading

Two Appellate Courts Consider D&O Insurers’ Obligation to Advance Defense Expenses

Within the space of just a few days, two federal appellate courts – the Fifth and Sixth Circuits – issued separate opinions consider D&O insurers’ obligations to advance defense expenses. The Fifth Circuit entered its March 15, 2010 decision in the high-profile Stanford Financial insurance coverage dispute. The Sixth Circuit’s March 11, 2010 opinion was … Continue Reading

Guest Post: More About D&O Insurance Coverage for Special Litigation Committee Expenses

In recent posts (here and here), I have discussed the issues surrounding coverage under D&O insurance policies for investigative costs and special litigation committee expenses. In response to these posts, readers Jeff Kiburtz and Cindy Forman of the Santa Monica law firm of Shapiro Rodarte & Forman have submitted the following guest blog post. This guest … Continue Reading

Court Orders Stanford Financial D&O Insurers to Advance Defense Expenses

The individual defendants in the various Stanford Financial-related SEC enforcement and criminal proceedings have been engaged in a long-running and procedurally complicated battle over whether the firm’s D&O insurers must advance the individuals defense expenses. In a sweeping January 26, 2010 opinion (here), Southern District of Texas Judge David Hittner rejected the grounds on which … Continue Reading

D&O Insurance: Investigative and Special Litigation Committee Defense Expense Held Covered

Among perennial D&O insurance issues are questions whether policy coverage is available for defense expenses incurred in connection with investigative costs, subpoenas and the costs associated with special litigation committees. A December 30, 2009 decision in the coverage lawsuit brought by MBIA against its D&O insurers considered all of these recurring issues, and reached some … Continue Reading

Stanford Financial’s D&O Insurer Can Advance Individuals’ Defense Costs

Stanford Financial Group’s D&O insurer may advance the individual directors’ and officers’ defense expenses without violating the court’s receivership order, according to an October 9, 2009 ruling by Northern District of Texas Judge David Godbey. A copy of Judge Godbey’s ruling can be found here.   As detailed in a prior post (here), the insurer … Continue Reading

D&O Insurance: Additional Consideration, “Loss,” and the “Bump Up” Exclusion

One of the recurring D&O insurance issues is the question of policy coverage for additional acquisition consideration paid to an acquired companies’ shareholders – so-called "bump up" claims. In an interesting and colorfully written September 28, 2009 opinion (here) that insurers undoubtedly will cite profusely in future disputes of this kind, District of Massachusetts Judge Nancy Gertner … Continue Reading
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