In the following guest post, the guest authors examine issues relating to the Professional Services Exclusion found in many private company D&O insurance policies. This article was co-authored by Matthew Schweiger, AVP Claims, D&O Management Professional Liability, Core Specialty, Jerry Grenon, AVP, Management and Professional Liability, Core Specialty, Elan Kandel, Member, Bailey Cavalieri LLC and James Young, Of Counsel, Bailey Cavalieri LLC. 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
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Increased Numbers of False Claims Act Actions and the D&O Insurance Coverage Implications
The number of False Claims Act cases, both those filed by the government and those filed by qui tam relators, is increasing. As a result, potential False Claims Act liability is increasingly important for companies and for their D&O insurers. At the same time, there have been recent court decisions, applying an expansive reading of D&O insurance policies, that have rejected D&O insurers’ attempts to deny coverage for False Claims Act claims against their policyholders. The recent decisions suggest that companies subject to False Claims Act claims potentially may be able to obtain coverage under their D&O insurance policies – and not only for defense expense, but for settlement amounts as well. An October 26, 2021 Insurance Journal article discussing the insurance implications of the growing number of False Claim Act cases can be found here.
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Court Rejects D&O Insurer’s Coverage Denial for COVID-Related Tradeshow Cancellation Claims
As readers know, there has been a wave of business interruption coverage insurance disputes arising out the pandemic. But the business interruption claims are not the only insurance coverage disputes the coronavirus outbreak has caused. An interesting recent D&O insurance-related coverage dispute involves the denial by a D&O insurer of coverage for lawsuits a health industry technology trade association faced following the March 2020 coronavirus outbreak-related cancellation of the association’s annual trade show.
In a recent decision, a federal district court, applying Illinois law, rejected the insurer’s coverage denial, holding that the policy’s professional services exclusion and contract exclusion did not preclude coverage. The court also rejected the insurer’s contention that the damages sought in the underlying litigation represented uninsurable restitution. Northern District of Illinois Judge Robert W. Gettleman’s October 19, 2021 opinion in the case can be found here. A November 1, 2021 post on the Hunton Insurance Recovery Blog about the opinion can be found here.
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Guest Post: 5th Circ.: D&O Insurer Must Cover Firm for Social Engineering Losses Despite Professional Services Exclusion
In the following guest post, Geoffrey B. Fehling and Michael S. Levine review and analyze a September 2, 2021 Fifth Circuit decision in which the appellate court reversed a lower court ruling and held that a D&O insurance policy must cover a settlement related to a social engineering loss. Geoffrey is a counsel in Hunton Andrews Kurth’s Boston office and Michael is a partner in the firm’s Washington, D.C. office. 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.
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Thinking About the Differences Between Private Company and Public Company D&O Insurance
Privately-held companies, on the one hand, and companies whose shares are public traded, on the other hand, face very different liability exposures. Because of these differences in liability exposures, the directors and officers liability insurance available for these types of entities varies – the D&O insurance form available for private companies is quite a bit different from the D&O insurance form available for public companies. A recent law firm memo took a brief look at the differences between the two forms of coverage. There some important additional considerations, that I discuss below.
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Guest Post: The Year in Review: 2018 Key D&O Insurance Coverage Decisions
As I have noted in a prior post, 2018 was a very eventful year in the world of directors and officers liability. In the following guest post, written by Kelly S. Johnson, Esq., Claims Counsel, Hiscox USA; Elan Kandel, Esq., Bailey Cavalieri; and Jennifer Lewis, Esq., Bailey Cavalieri, the authors make it clear that 2018 was also a very eventful year for important D&O insurance coverage decisions. I would like to thank the authors for allowing me to publish their article. 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’ guest post.
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Second Circuit: Professional Services Exclusion Precludes D&O Coverage for NASDAQ’s Facebook IPO Claims
A recurring D&O insurance issue is the question of whether or not coverage for a particular claim is precluded under the relevant policy’s professional services exclusion. A recent decision by the Second Circuit addressed questions concerning the applicability of a professional services exclusion in a D&O insurance coverage dispute arising out of the mistake-plagued Facebook IPO. In a January 22, 2018 opinion (here), the appellate court affirmed the district court’s ruling that coverage for the settlement of Facebook IPO investors’ claims against NASDAQ was precluded by the NASDAQ’s D&O insurance policy’s professional services exclusion. The opinion includes some interesting discussion of considerations relevant to the exclusion’s applicability.
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Key D&O Insurance Coverage Appeals to Watch This Year
Over the last few days, I have published several posts looking back at 2017. In addition to looking back, this is also the time of year for looking forward as well. Among other things to watch out for this year is a series of D&O insurance coverage cases that are now pending in the appellate courts. In a January 9, 2018 article (here, subscription required), Law 360 author Jeff Sistrunk identifies three of these cases to watch this year. As discussed below, these cases not only are worth watching but could have important ramifications as well.
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Guest Post: The Year in Review: 2017 Key D&O Insurance Coverage Decisions
In the following guest post, Jennifer Bergstrom, Esq., Senior Claim Counsel, Hiscox USA, Elan Kandel, Esq. and Jennifer Lewis, Esq. of Bailey Cavalieri take a look at the key D&O insurance coverage decisions of 2017. I would like to thank the authors for allowing me to publish their article. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ guest post.
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Key D&O Insurance Policy Wording Issues and Coverage Concerns
Over the course of several years in which the marketplace for D&O insurance has been highly competitive, the scope of coverage available has continued to evolve and expand. Terms and conditions are available today that were not available even a short time ago, as carriers attempt to distinguish themselves in a crowded marketplace. The marketplace is a buyer’s market, but in order to ensure that corporate insurance buyers obtain the best coverage available, it is important for them to understand the options available. In an interesting December 6, 2017 Law 360 column entitled “D&O Insurance Coverage Tips for Financial Institutions” (here) Robert Long and Nanci Weissgold of the Alston & Bird law firm examined the issues and options involving several key areas of D&O liability insurance coverage.
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