By Richard W. Westling and Mark M. Bell
In Directors’ and Officers’ Insurance and Its Role in Government Investigations, authors Richard W. Westling and Mark M. Bell point out that the number, scope, and breadth of government investigations have increased dramatically. The cost of responding to such investigations including collecting, reviewing, and producing responsive documents can be substantial, resulting in multi-million dollar exposures even when the governmental entity ultimately determines that no wrongdoing occurred. As the volume, intrusiveness, and cost of government investigations increase, entities are more frequently looking to their D&O policies as a source of indemnification for these costs. This commentary provides a description of D&O insurance including its quirks and features as well as common coverage issues it engenders. The commentary provides an overview of government investigations and related trends, noting that they implicate all all three sides of D&O insurance – Sides A, B and C. The commentary imparts an understanding of both of the types of government investigations that can occur and the broad array of agencies that pursue them. It analyzes recent case law addressing courts’ interpretations of D&O policies as they relate to government investigations. It examines a spectrum of new commercially available products that specifically insure the costs of responding to particular types of government investigations, and concludes with several practical tips for addressing coverage issues on the front end.
Richard W. Westling was formerly in private practice with Waller, Lansden, Dortch & Davis, LLP in Nashville, Tennessee and now is first Assistant U.S. Attorney in New Orleans. Mr. Westling represented businesses and individuals in government investigations and enforcement litigation when he was with Waller, Lansden, Dortch & Davis. Previously, he served as federal prosecutor with the U.S. Department of Justice in Washington and as an Assistant U.S. Attorney in the Eastern District of Louisiana. He is a frequent author and lecturer on government investigations and white collar defense topics.
Mark M. Bell is an attorney with Waller, Lansden, Dortch & Davis, LLP in Nashville, Tennessee. Mr. Bell practices commercial litigation with a focus on insurance matters. He has authored insurance and other articles appearing in the Vanderbilt Law Review, Connecticut Insurance Law Journal, and Ohio Northern University Law Review among others.
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