One panelist noted that as prices are driven down, there are opportunities for additional premium by expanding coverage. One particular issue discussed by the panel was coverage for SEC (and other governmental) investigations. The panel noted that current D&O policies cover SEC investigations upon the insured’s receipt of formal orders of investigation, but oftentimes the insured must respond to SEC requests for information (and even subpoenas) long before they receive such formal orders. The panel members that represent insureds noted that they have begun to seeking coverage from insurers without the need for the insured to receive formal orders of investigation before defense costs are covered.
The panel members that represent insureds raised an issue with respect to the increasing practice of including “exclusions” in insuring agreement definitions. For example, insuring agreements providing what does not constitute loss. These panel members stated that it is a concern for insureds, because it is their burden of proof to demonstrate that a claim falls within the insuring agreement. The panelists that represent insurers noted that these definitions have been revised to address the issue of insurers being forced to defend claims that were never intended to be covered.
One topic that entire panel agreed on was the need to draft and finalize endorsements prior to binding policies to avoid potential miscommunications about what was agreed to or negotiated between the parties.