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Since the dawn of time, one of the biggest D&O insurance coverage issues has been allocation – that is, the division of loss between covered and noncovered claims or between covered and noncovered parties. After a series of developments in the mid-90s, including the standardization of policy allocation language, litigated allocation disputes became less frequent (though to be sure, allocation is still very much an issue in many D&O insurance claims.) However, in recent years, there has been a series of Delaware court decisions revisiting both allocation issues and what has become the standard D&O insurance allocation provision.

In the latest example of the reemergence of litigated allocation disputes, a Delaware court has held that the “Larger Settlement Rule” should be used to resolve an allocation dispute, notwithstanding the presence in the applicable allocation provision of relatively standard “relative exposures” language. With this latest decision, and in light of the other recent Delaware allocation decisions, some differentiating principles can be discerned, as discussed below.

A copy of the Delaware Superior Court’s June 18, 2026, decision in the Hemisphere Media Group case can be found here. The July 10, 2026, LinkedIn post of Geoffrey Fehling of the Hunton Andrew Kurth law firm discussing the court’s allocation decision in the Hemisphere case can be found here.

Continue Reading Del. Court: “Larger Settlement Rule” Applies to Insurance Allocation Dispute

Public company D&O insurance policies provide entity coverage (that is, insurance for the benefit of the insured organization) only for “Securities Claims.” But what is a “Securities Claim”? That is the question that Delaware’s courts have grappled with in a long-running dispute between the telecommunications company Verizon and its insurers.

The Delaware Superior Court had…

Earlier this week (here), I noted the securities class action lawsuit that a plaintiff shareholder filed against AT&T in the wake of the Wall Street Journal’s series of articles about the network of lead telephone cables in the U.S. Now, another plaintiff has initiated a separate but parallel lawsuit against Verizon. This latest lawsuit, which was filed by the same plaintiff law firm as filed the AT&T lawsuit, alleges that Verizon was aware of but failed to disclose to investors the risks and hazards the company faced owing to its ownership of the lead telephone cables. A copy of the August 1, 2023, complaint against Verizon can be found here.

Continue Reading Verizon Hit with Lead Telephone Cable-Related Securities Suit

As I noted in a recent post (here), a recurring public company D&O insurance coverage issue is whether a claim in which a company is involved qualifies as a “Securities Claim.” This question matters because D&O insurance provides coverage for the corporate entity (as opposed to the insured directors and officers) only for “Securities Claims” as that term is defined in the policy. In a recent decision, a Delaware Superior Court judge concluded that a bankruptcy trustee’s fraudulent transfer claim against Verizon Communications and related entities came within the applicable D&O insurance policy definition of “Securities Claim.” The coverage dispute illustrates the intricate issues that can arise in determining whether a claim qualifies as a “Securities Claim.” A copy of the Court’s February 23, 2021 Opinion can be found here.
Continue Reading D&O Insurance: Bankruptcy Trustee’s Fraudulent Transfer Claim is a “Securities Claim”

delawarePublic company D&O insurance policies typically provide coverage for the corporate entity only for “Securities Claims.” A recent case in the Delaware Superior Court involved the question of whether a bankruptcy trustee’s claim related to Verizon’s multi-billion dollar spinoff of its electronic directories business was a “Securities Claim.” In an interesting and detailed opinion dated March 2, 2017 and released March 15, 2017 (here), Judge William C. Carpenter, Jr. ruled that the bankruptcy trustee’s claim was a “Securities Claim” within the meaning of the Verizon’s D&O insurance policy and therefore that Verizon’s insurers were liable of the costs incurred in defending against the trustee’s claim. The opinion makes for interesting reading for anyone interested in how these kinds of disputes can arise, and also has some important practical lessons.  
Continue Reading D&O Insurance: When Is a Claim a “Securities Claim”?