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

Companies in the pharmaceutical industry are frequent targets of securities class action lawsuits. In the following guest post, Tony Kriesel, Claims Specialist with IQUW; Elan Kandel, a Member of the Bailey Cavalieri law firm; and James Talbert, an Associate at Bailey Cavalieri, take a look at the reasons for the pharmaceutical industry’s high securities litigation frequency experience and at the implications of the lawsuit frequency for pharmaceutical companies and their insurers. They also consider the significance of the interrelated claims provision typically found in D&O insurance policies for securities claims involving pharmaceutical companies. 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: D&O Risks and Challenges for Pharmaceutical Companies and their Insurers

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

Most professional liability insurance policies are written on a claims-made basis – that is, they cover only claims first made during the applicable policy period. A recurring issue under these kinds of policies is the question of when a claim was first made. This question can be particularly complicated if there were pre-policy period communications about a subject that subsequently results in a lawsuit. The question is whether the claim was first made at the time of the prior communications or at the time of the subsequent lawsuit. Two recent cases reached different conclusions about whether not pre-policy period communications represented a claim. As discussed below, these diverging decisions raise interesting issues.
Continue Reading Claims Made Policies: The Problem of Pre-Policy Period Dispute Communications