LexisNexis® Legal Newsroom
D&O Insurance: Prior and Pending Litigation Exclusion Bars Coverage for Lawsuit Filed Years Before But Served During the Current Policy Period

Under which claims made D&O insurance policy is there coverage for a claim that was filed under seal years ago but not served on the policyholder until the policy period of the current policy? If you find the answer “no policy” as unsatisfying as I do, read on. In a September 15, 2014...

Advisen Releases Third Quarter Corporate and Securities Claims Trends Report

Continuing an recent downward trend, corporate and securities litigation filings during the third quarter declined, both compared to the prior quarter and compared to the third quarter last year, according a new report from Advisen, the insurance information firm. In its report, entitled “D&O...

D&O Insurance: Contractual Liability Exclusion Precludes Coverage for Negligent Misrepresentation Claims

In an October 20, 201 opinion ( here ), Middle District of Florida Judge Roy B. Dalton, Jr., applying Florida law, entered summary judgment for a D&O insurer, holding that the insurer was not liable for the stipulated judgment its insured had entered because the policy’s broad contractual liability...

D&O Insurance: Subsequent Lawsuit to Enforce Judgment Held Interrelated with Prior Adversary Action

The question of whether or not a subsequent claim is interrelated with a prior claim — and therefore deemed first made at the time the earlier claim was filed – is a recurring D&O insurance coverage issue. If the later claim is to be deemed first made at the time of the prior lawsuit...

Two Recent Massive Merger Objection Lawsuit Settlements Include Significant D&O Insurer Contributions

One of the great litigation curses in recent times in the corporate litigation arena has been the rise of the merger objection litigation. These kinds of lawsuits, which these days arise in connection with almost every M&A transaction , often are settled for nothing more than an agreement to make...

Largest Derivative Lawsuit Settlements

My post earlier this week about the $275 million Activision Blizzard shareholder derivative lawsuit settlement – and in particular my suggestion that the Activision settlement may be the largest derivative suit settlement ever – provoked an interesting flurry of emails and conversations about...

D&O Insurance: Eleventh Circuit Holds Insured v. Insured Exclusion’s Applicability to FDIC Failed Bank Claims Ambiguous

Going all the way back to the S&L crisis, a recurring insurance coverage issue that has arisen in the failed bank context has been the question of whether or not coverage for a claim brought by the FDIC in its capacity as receiver of a failed bank against the failed bank’s former directors...

The Top Ten D&O Stories of 2014

The year just ended was an eventful one in the world of directors’ and officers’ liability. Many of the year’s key events represented significant changes in the D&O liability environment. Many of the changes during 2014 have important implications for 2015 – and possibly for...

Will Investors Sue Over the Sony Hack Attack?

As I noted in my recent rundown of the top D&O stories of 2014, one of the most important developments during the year just finished was the emergence of cyber security as a D&O liability concern. During 2014, plaintiff shareholders launched cyber breach-related derivative lawsuits against the...

D&O Insurance: No Coverage for Enforcement Action Because Claim First Made When SEC Subpoena Served Before Policy Inception

A recurring D&O insurance coverage issue involves the question of whether or not a subpoena constitutes a claim, as I have noted on prior posts (for example, here ). When this issue comes up, the dispute is usually over whether or not there is coverage under the policy for the costs of responding...

N.Y. Intermediate App. Ct. Allows D&O Insurers to Assert Public Policy Defense in Long-Running Bear Stearns Coverage Action

In the latest round in the long-running battle over whether there is D&O insurance coverage for the amounts Bear Stearns paid in settlement of an SEC enforcement action for alleged market timing, the D&O insurers may have finally found an issue on which they may be allowed to try to dispute coverage...

Court Rules No D&O Insurance Coverage for Civil Theft Jury Verdict

In a summary judgment ruling in a coverage lawsuit arising after a civil jury trial, a Southern District of Florida judge applying Florida law has ruled that there is no coverage under a D&O insurance policy for a jury verdict that included the award of treble damages based on the jury’s determination...

Thinking About the Data Breach Securities Class Action Lawsuits Yet to Come

There has been extensive litigation filed in the wake of the many high-profile data breaches over the last several years, but by and large the lawsuits have been filed on behalf of consumers or employees. Along the way, there have also been lawsuits filed against the directors and officers of the companies...

Challenging Consequences: The Government’s Requirement for Wrongdoing Admissions in Civil Fraud Suits

In one of the more troublesome recent developments for corporate officials who find themselves targeted by government investigations, both the U.S. Department of Justice and the Southern District of New York U.S. Attorney’s Office have made it clear that as part of the settlement of civil fraud...

Securities Suits Hit Companies Using Stock Promoters

When plaintiffs’ lawyers filed a complaint against the company earlier this week, Cellular Biomedicine Group became the latest firm to be hit with a securities class action lawsuit relating to the company’s alleged use of a stock promotion firm. There were a number of companies hit with similar...

D&O Insurance: The Basic Value Proposition

I make it my business on this blog to try to write about the latest developments and current trends in the world of D&O, but I think that every now and then it is a good idea to step back and take a look at the bigger picture. For example, let’s consider the standard D&O Insurance policy...

U.S. Trade Sanctions and D&O Insurance

As part of its conduct of foreign affairs and of its national security program, the U.S. government has instituted a series of economic and trade sanctions against a number of countries and a long list of designated individuals . The various sanctions programs are administered by the Office of Foreign...

Thinking About Excess D&O Insurance

In many cases, companies’ D&O insurance programs are structured in several layers, with one or more policies of excess of insurance written over top of a primary layer. The excess insurance is often said to be written on a “follow form” basis, meaning that the primary policy’s...

D&O Insurance: The Major Shareholder Exclusion

An exclusion sometimes found in D&O insurance policies precludes coverage for claims made by shareholders who have a specified percentage of ownership in the insured company. This type of exclusion is called a Major Shareholder Exclusion (or, sometimes, the Principal Shareholder Exclusion). An interesting...

D&O Insurance: Regulatory Exclusion Precludes Coverage for Relator’s Qui Tam Action

As I have noted in prior posts, “ qui tam actions” under the False Claims Act often fit uncomfortably with typical D&O insurance policy terms and provisions. For example, the procedure whereby qui tam actions are filed but not immediately served raise questions of the claims made date...

D&O Insurance: Professional Liability Exclusion Precludes Coverage for D&O Claims Against Ponzi Schemer’s Bank

In a coverage dispute arising out of the long-running Rothstein Ponzi scheme scandal , a Southern District of Florida judge, applying Florida law, has held that the professional services exclusion in the Rothstein bank’s D&O insurance policy precluded coverage for claims brought against the...

Fourth Circuit: Guilty Pleas Trigger D&O Policy Exclusion and Insurer’s Right to Seek Recoupment of Previously Paid Defense Expenses

It sometimes comes as a surprise to some policyholders that D&O carriers contend that they have the right to try to recover amounts they have paid as defense expenses if it turns out that coverage for a claim is precluded by a policy exclusion. However, an insurer’s right of defense expense...

D&O Insurance: Debtor-in-Possession Claims and the Insured vs. Insured Exclusion

The traditional Insured vs. Insured exclusion found in many D&O insurance policies is a frequent source of claims disputes, particularly in the bankruptcy context . As its name suggests, the Insured vs. Insured exclusion precludes coverage for claims brought by one Insured against another Insured...

Criminal Proceedings, D&O Insurance and Corporate Indemnities

Here’s the scenario: A former company CEO faces criminal charges for alleged bribery in which he was involved while he was at the company. The company’s D&O insurance provides funding for his defense, but the amount of the insurance available proves to be insufficient to take him through...

Next Up: A Home Depot Data Breach-Related D&O Lawsuit?

After claimants filed shareholders’ data breach-related derivative suits against the boards of Target ( here ) and Wyndham Worldwide ( here ), a number of commentators (including me) asked whether we could see a wave of cybersecurity related D&O lawsuits. Interestingly, since these two lawsuits...