An acquired bank’s D&O insurer’s defense cost obligation to the bank’s directors and officers in connection with merger-related litigation continued after the merger transaction closed and was owed to the acquiring bank, a federal district court judge has held, rejecting the policy-based arguments on which the insurer relied to contend that its payment obligations ceased at the time of the deal closing. District of New Jersey Judge John Michael Vazquez’s unpublished September 18, 2017 opinion containing his ruling can be found here.
Continue Reading D&O Insurer Must Continue Defense Expense Reimbursement Post-Merger

aflAs I have previously noted (for example, here), several of the standard D&O policy exclusions are designed to keep claims in the their proper lanes – that is, to make sure that the D&O policy doesn’t wind up picking up losses more appropriately addressed by another policy in a policyholder’s insurance program. One of these standard exclusions is the bodily injury and property damage exclusion – or, as it is more commonly known, the BI/PD exclusion – which precludes coverage for claims of bodily injury or property damage that are more appropriately addressed by a CGL policy.

A recent federal court decision considered a D&O insurance policy’s BI/PD exclusion in the context of a kind of claim that is becoming increasingly common – a professional athlete’s liability claims for head injuries sustained in competition. In his November 17, 2016 opinion in the case, Eastern District of Louisiana Judge Eldon Fallon concluded that former Arena Football League’s D&O insurance policy’s BI/PD exclusion precluded coverage for Lorenzo Breland’s claims against the league related to head injuries he sustained as a player. However, the specifics of Breland’s claims raise some interesting issues that Judge Fallon’s opinion does not address. These issues in turn raise questions about the exclusion’s appropriate reach. A copy of Judge Fallon’s opinion can be found here.
Continue Reading Football Player’s Concussion Claims Test D&O Policy Exclusion