wisconsinAs I have noted in prior posts (most recently here), a recurring D&O insurance coverage issue is the question of whether or not an insured person was acting in an insured capacity at the time he or she allegedly committed the wrongful acts alleged against him or her. These questions arise because individuals often act in numerous capacities, but the D&O policy provides coverage only for those acts undertaken as a director or officer of the insured company.

A recent case involved similar questions arising under a professional liability insurance policy that provided coverage for the insured individual’s acts in his capacity as the trustee of two trusts. The individual sought coverage under the policy for claims brought against him in his capacity as a director or officer of separate companies in which the trusts held controlling ownership interests. In a June 30, 2016 opinion (here), the Wisconsin Supreme Court, applying Wisconsin law,  affirmed the intermediate appellate court’s holding that under the policy’s business enterprise exclusion, which precluded coverage for claims arising from the individual’s actions for entities other than the specified trusts, there was no coverage under the policy and the insurer had not breached its duty to defend.
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