Many D&O insurance programs consist of multiple layers of insurance arranged with a layer of primary insurance and one or more layers of excess insurance. In order to ensure that the insurance in the program operates consistently and uniformly, the excess insurance is usually written on a so-called “follow form” basis, meaning that the excess insurance incorporates the primary’s policy’s terms and conditions, subject to any express provisions in the excess policy to the contrary. A recent case from the Court of Appeal for Ontario considered the meaning and impact of excess follow form coverage in the context of a dispute over whether a policyholder could exercise an option to purchase extended reported period coverage from its excess insurer. The decision, while arguable unremarkable in and of itself, nevertheless may have some important lessons for excess insurers. A copy of the Ontario Appeal Court’s July 13, 2022 decision can be found here.
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Thinking About the Contractual Liability Exclusion
Regular readers know that a recurring topic I have explored on this site is the scope of the contractual liability exclusion found in many professional liability and management liability insurance policies. In prior posts I have argued that insurers sometimes apply the exclusion over-broadly so as to exclude matters that I believe should otherwise be covered under the policy. However, in a recent appellate ruling, in which the Ontario Court of Appeal concluded that as a result of the application of the contractual liability exclusion, a solar panel engineering company’s E&O insurer did not have a duty to defend the company in an underlying arbitration proceeding. As discussed below, I believe the appellate court’s reasoning is sound and that the case represents an example not only of when the exclusion may be applied appropriately but also of the appropriate limits of the exclusion’s reach. A copy of the Ontario court’s September 10. 2021 opinion can be found here.
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Guest Post: Court Dismisses Statutory Misrepresentation Claim against Credit Union Board in Landmark Decision
In the following guest post, Deepshikha Dutt, Douglas B.B. Stewart,of and Frank E.P. Bowman of the Dentons law firm review and analyze a recent decision of the Ontario Superior Court of Justice relating to the liabilities of directors and officers under Ontario statutory law for misrepresentations in offering statements. This article is republished here with permission from Dentons. I would like to thank Deepshikha, Douglas, and Frank for allowing me to publish their article here. 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 an article. Here is Deepshikha, Douglas, and Frank’s article.
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Securities Regulators Around the World Adopt Whistleblower Reporting Programs
One of the Dodd-Frank Act’s signature features was its creation of potentially massive bounties for whistleblowers that reported financial fraud to the SEC. During the time that the Dodd-Frank whistleblower program has been in place, the agency has made a number of significant bounty awards. Mary Jo White, the SEC chairwoman, has said that the program “has rapidly become a tremendously effective force-multiplier, generating high quality tips and, in some cases, virtual blueprints laying out an entire enterprise, directing us to the heart of an alleged fraud.” The SEC’s whistleblower program has also attracted the attention of other countries’ securities regulators, with the various countries reaching a variety of conclusions about the program, particularly its bounty award feature. In the past several days, securities regulators in Ontario and in Germany have each adopted their own whistleblower programs. The different approach the regulators have taken is interesting, as discussed below.
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Ontario Securities Suit Claimants Denied Leave to Proceed
Shareholder claimants seeking to pursue a misrepresentation claim under the Ontario Securities Act must obtain leave of court to proceed based on a statutory requirement that the plaintiff must show a “reasonable possibility that the action will be resolved at trial in favor of the plaintiff.” Ontario’s courts agree that this requirement sets a “low