The past year once again saw a breadth of court decisions addressing a wide variety of directors and officers and professional liability insurance coverage issues. At various levels, state and federal courts across the country issued notable decisions in this arena. In this report, we focused on topics we believe will continue to be important in the directors and officers and professional liability insurance field. We hope you find the following selection of cases to be informative and helpful.
D&O Liability
Delaware Corporations Can Now Purchase D&O Coverage Through Captives
By Jeffrey Bohn & Troutman Pepper Locke on
On February 3, 2022, Delaware Governor John Carney signed Senate Bill 203 (the “Bill”) into law, which allows corporations to purchase and maintain directors’ and officers’ (“D&O”) liability insurance through captive insurance companies.…
COVID-19: Address the real-world implications for insurers and get your roadmap for overcoming the obstacles ahead
Patrick Byrnes will present at a 75-minute complimentary webinar, presented by Intelligent Insurer and sponsored by CRC Group, on real-time challenges facing brokers, insurers and risk managers. A panel of experts will cover key questions the industry is facing and provide a step-by-step guide to confronting the COVID-19 crisis.…
Second Circuit Revives LIBOR Suit Against Barclays; Scandal Continues to Haunt Big Banks
By Troutman Pepper Locke on
Earlier this week, the Second Circuit overturned Southern District Judge Shira Schiendlin’s earlier decision granting dismissal of the complaint by class action plaintiffs who had brought federal securities claims against Barclays after the LIBOR scandal broke. …
Developments in D&O Insurance: Increased Demand from Nonprofit Organizations
By Troutman Pepper Locke on
Posted in D&O Liability, United States
D&O insurance has long insulated directors and officers of public companies from potential liability. Increasingly, however, board of nonprofit organizations and private companies are looking at D&O insurance for similar protection. …
The Seventh Circuit Rules that an Insurance Contract’s Exclusion of Any “Multiplied Damages” Does Not Mean the Multiplier Used to Enhance an Award of Attorney Fees
By Troutman Pepper Locke on
In a flawed opinion handed down in Carolina Casualty Insurance Co. v. Merge Healthcare Solutions, the Seventh Circuit ordered an insurance company to pay $3.15 million for attorney fees awarded to the plaintiffs who sued the company’s insured. Some shareholders sued Amicas, Inc. and its officers, who were insured by Carolina Casualty Insurance Co. under a D&O policy. …
Federal Securities Class Action Filings Decline through Q2 2013
By Troutman Pepper Locke on
Federal securities class action activity has been sluggish through the first half of 2013. According to a recent report by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse (the “Report”), plaintiffs filed only 74 complaints through Q2, a 16% decline from the same 6-month period in 2012.1 …
Morgan Keenan Settlement Shows Risk to Mutual Fund Directors When Valuing Mortgage-Backed Securities
By Troutman Pepper Locke on
In mid-June, eight former fund directors of Morgan Keenan & Co. settled allegations with the Securities and Exchange Commission that they had failed to exercise proper oversight with respect to mutual funds that had overvalued mortgage-backed securities during the 2007-08 housing market collapse. The settlement comes two years after Morgan Keenan agreed to pay $200 million to settle similar SEC claims against the firm itself and two employees who managed the funds. …
New York’s Highest Court Delivers Important Disgorgement Decision
By Troutman Pepper Locke on
On June 11, 2013, the New York State Court of Appeals reinstated a policyholder’s claim for coverage for a $160 million “disgorgement” payment to the SEC. The decision, J.P. Morgan Securities v. Vigilant Insurance, No. 113 (June 11, 2013), is available here. …
Second Circuit: Excess D&O Coverage Not Triggered Until Underlying Limits Exhausted by Actual Payment
By Troutman Pepper Locke on
Posted in D&O Liability, United States
On June 4, 2013, the Second Circuit Court of Appeals in Ali v. Federal Insurance Company, et al., No. 11-5000-cv, affirmed a lower court’s decision declaring that the coverage obligations of excess D&O insurers are not implicated until the underlying insurance has been exhausted by actual payment of loss, even when the underlying carriers are insolvent. The appeal was taken from the United States District Court for the Southern District of New York. …