D&O policies vary quite a bit from carrier to carrier, and language on “standard” exclusions can change from year to year. Accordingly, it is important to do a yearly review of your D&O policy to make sure your company has the right coverage. Three recent federal court decisions interpreting the “insured vs. insured” or “I v. I” exclusion remind us why examining specific policy language and understanding how it may apply to your business is so important. Continue Reading Trio of Recent Decisions on the I v. I Exclusion Should Remind Policyholders to Annually Review the Language in Their Policy to Avoid Losing Coverage
Erica Villanueva and Tyler Gerking will be presenting to the Association of Corporate Counsel (ACC) on September 14 (in San Francisco) and 15 (in Palo Alto) about private company D&O liability insurance, also known as management liability insurance. Below is a description of the program, which will touch on hot issues that many companies are dealing with right now. Use the links to view the event details and register online.
Private D&O Insurance: Things You Should Know
Companies are staying private longer and purchasing private company directors’ and officers’ liability (D&O) insurance, sometimes known as “Management Liability” insurance. When it comes to D&O coverage, most private companies focus on two things: obtaining it, and keeping the premium low. When a company faces a claim, however, it discovers there is much more complexity to private D&O insurance, and often broader coverage than a public company D&O policy. Accessing and maximizing the available coverage may require a concerted, strategic effort on the part of the company, its insurance broker, and insurance coverage counsel. This program will cover:
- Key features of management liability policies
- Common exclusions and limitations
- The practical impact of certain clauses – and widely-available coverage enhancements that can mitigate these impacts
- Implications of common pitfalls and mistakes in reporting and managing claims’”
One of the most heavily-litigated exclusions in modern insurance coverage practice was the subject of a recent district court decision involving allegedly misleading marketing by for-profit colleges. Exclusions for claims or occurrences arising out of acts done in connection with the “rendering of, or actual or alleged failure to render, any professional services for others” – the so-called professional services exclusion – is the source of endless disputes between insurers and insureds. There are a number of reasons for this; the exclusion is somewhat vague and has been interpreted in varying ways across and even within different jurisdictions.
What has made the exclusion so troubling for policyholders is the fact that its scope and reach has been expanded so far beyond its initial underwriting purposes. The exclusion commonly appears in Commercial General Liability and D&O policies, and its intent is to exclude underlying claims that should be covered by Errors & Omissions policies. A CGL policy is not intended to cover claims for an attorney’s malpractice during litigation or an architect’s negligence in designing a building, and the professional services exclusion is included in those policies to make that clear. Continue Reading District Court Further Limits Application of Professional Services Exclusion
When a venture capital or private equity firm invests in a portfolio company (PC) and places a general partner on the PC’s board, they typically require that the PC agree to defend and indemnify the board member in any litigation arising out of their board service, and to purchase directors’ and officers’ liability insurance. However, the D&O insurance requirements are typically quite vague, and some firms may be surprised to learn of key gaps in the PC’s coverage. These gaps are usually discovered when the VC/PE firm needs the coverage most – i.e., after a lawsuit has been filed, naming their board member as a defendant. Here are two examples I’ve come across in representing venture capital and private equity firms: Continue Reading Do You Know What’s In Your Portfolio Company’s D&O Insurance?