Reimbursement

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Sarah Abrams

As readers know, one aspect of President Trump’s exercise of his presidential powers has been his willingness to grant pardons to certain persons, including even, as it has turned out, corporations. In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, takes a look at the possible D&O insurance implications for a policyholder that has been convicted of a crime but granted a pardon. I would like to thank Sarah for her willingness to allow me to publish her 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 Sarah’s article. Continue Reading Guest Post: Pardon Me

Policyholders are often surprised when their professional liability insurers contend they (that is, the insurers) have the right, after a determination of non-coverage, to seek recoupment of amounts paid under the policy. These disputes can be controversial enough even when the policy expressly provides the insurer with the right to seek recoupment; the controversy is greater when the policy does not expressly provide for recoupment but the insurer nonetheless seeks reimbursement in reliance on its reservation of its rights to seek recoupment.

A recent decision by the Sixth Circuit, applying Michigan law, explored these issues and ultimately affirmed the district court’s ruling that the insurer was entitled to recoup amounts paid in defense after the underlying complaint was amended to remove the only covered claims, even though the policy contained no express recoupment provision. The appellate court’s decision raises several interesting issues, as discussed below. A copy of the Sixth Circuit’s April 8, 2024, opinion can be found here. (Hat tip to Geoffrey Fehling of the Hunton Andrews Kurth law firm whose LinkedIn post linked to the appellate opinion, here).Continue Reading 6th Circ. Affirms Insurer’s Recoupment Right Even Without Express Policy Grant