Archives: D&O, E&O, Professional Liability

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Key questions corporate tech, legal, and security officers need to ask when considering cyber coverage

By Russell Squire on Posted in Cyberliability, D&O, E&O, Professional Liability, Insurance Coverage, Insurance General
Cyber incidents and attacks, whereby hackers target companies for ransom, to obtain sensitive information, or for other reasons, are a significant and growing threat. In 2021 alone, cyber incidents caused roughly $6 trillion in losses, and the consensus is that the threat of incidents will remain strong. Corporations are increasingly seeking insurance against this risk, … Continue Reading

D&O coverage dispute? Don’t forget about the Delaware option

By Stephen Raptis on Posted in D&O, E&O, Professional Liability, Insurance Coverage, Insurance General
Corporations embroiled in coverage disputes with their D&O insurers may be in the unenviable position of having to bring a lawsuit to enforce their rights. One of the first considerations the corporation faces is where it should file its coverage action. Some may assume that they are limited to the jurisdiction where the corporation principally operates or … Continue Reading

Navigating the “Bump-Up” exclusion in 2023: Rules for the road

By Carolyn Rosenberg, Andy Moss and Jessica E. Gopiao on Posted in D&O, E&O, Professional Liability, Insurance Coverage, Insurance General, Insurance News of Note
M&A activity is making a comeback in 2023, according to Bloomberg Law (“M&A Roars Back in $40 Billion Surge Led by Miners, Storage” A. Kirchfeld and D. Nair, Feb. 6, 2023). The rise in transactions—and the likelihood of claims involving them—will no doubt lead to continued D&O insurance coverage disputes over the “bump up” exclusion. Policyholders … Continue Reading

Key considerations for companies in procuring or renewing D&O coverage

By Miranda Jannuzzi and Andy Moss on Posted in D&O, E&O, Professional Liability, Insurance Coverage, Insurance General
Directors’ and Officers’ liability (“D&O”) insurance offers key protections to a company’s board members and management by serving as a financial backstop for their indemnification rights as well as their personal assets in the event directors or officers are the subject of claims or investigations based on their service to the company.  D&O insurance also … Continue Reading

You’ve been sued: An insurance attorney’s top tips for securing (and preserving) coverage

By Maisie McDonald and John Vishneski on Posted in D&O, E&O, Professional Liability, Insurance Coverage, Insurance General
Do not assume insurance coverage is unavailable   Today’s insurance market is complex.  It encompasses a wide range of insurance policies covering all manner of events and circumstances.  Beyond more traditional coverage for personal injury or property damage (under commercial general liability (CGL) policies), companies now routinely purchase Directors & Officers (D&O) policies, Errors & Omissions … Continue Reading

Guaranteed Rate v. Ace American Insurance – a victory for policyholders seeking coverage for government investigations

By Zachary S. Roman and Dominic Rupprecht on Posted in D&O, E&O, Professional Liability, Financial Insurance Coverage, Government investigations, Insurance Coverage, Insurance General
Government investigations by SEC, DOJ, and state attorney generals are a significant source of exposure for companies and their directors and officers. Companies can spend millions of dollars responding to a government subpoena or investigative demand. The broadly worded demands for information or testimony typically require extensive searches through mountains of paper documents and electronically … Continue Reading

D&O insurance to counter ESG litigation – new issues for insurers and policyholders

By Kya Coletta and Benjamin Fliegel on Posted in D&O, E&O, Professional Liability, Environmental, Insurance Coverage, Insurance General
Strong environmental, social and corporate governance (ESG) business policies are critical to address the fluctuating, unprecedented risks in this changing climate. Any company planning to expand and thrive in the next few decades must evaluate its collective conscientiousness for social and environmental factors, including preparing for the social and market upheavals resulting from greenhouse gas … Continue Reading

D&O insurance for the cannabis industry

By Jake Ziering and Marc Hauser on Posted in Cannabis, D&O, E&O, Professional Liability, Insurance Coverage, Insurance General
Cannabis and the D&O market in 2022 In the early days of 2022, cannabis companies and investors have cause for guarded optimism. The once very real specter of federal intervention in the burgeoning industry seems to have faded into the background as successive presidential administrations have declined to push the issue, and now, all but … Continue Reading

Year in review: Reed Smith’s Insurance Recovery team highlights top insurance topics of 2021

By Jalen Brown and Ashley Jordan on Posted in Cyberliability, D&O, E&O, Professional Liability, Insurance Coverage
At Reed Smith, we pride ourselves on forming true partnerships with our clients to find creative and unexpected solutions to the most challenging insurance coverage issues. As part of this commitment, we have authored a column for Thomson Reuters to provide advice, strategies, and information on the full range of insurance coverage issues affecting commercial … Continue Reading

Labels, Shmabels: Recent Decisions Confirm No “Restitution / Disgorgement” Exclusion in Management Liability Policies

By Kathryn Bayes and Courtney Horrigan on Posted in D&O, E&O, Professional Liability, Financial Insurance Coverage, Insurance Coverage
Ever since the Seventh Circuit’s 2001 decision in Level 3 Communications, Inc. v. Federal Insurance Co., 272 F.3d 908 (7th Cir. 2001), insurance companies have argued that settlements constituting restitution or disgorgement are uninsurable on grounds of public policy. While numerous decisions since 2001 have undercut this defense, two recent decisions out of the New … Continue Reading

End to long-running dispute over uninsurability under D&O insurance

By Christopher Kuleba and Matthew B. Weaver on Posted in D&O, E&O, Professional Liability, Financial Insurance Coverage, Insurance Coverage
Putting an end to a 12-year-old dispute between J.P. Morgan Securities’ predecessor, Bear Stearns & Co., and several of its insurers, on November 23, 2021, New York’s high court held that J.P. Morgan’s $140 million payment to the Securities and Exchange Commission (SEC) did not constitute an uninsurable “penalty” under J.P. Morgan’s excess directors & … Continue Reading

D&O insurance basics (Part 2)

By Andy Moss and Carolyn Rosenberg on Posted in Commercial General Liability, D&O, E&O, Professional Liability, Insurance Coverage, Insurance General
Directors’ and officers’ liability (D&O) insurance protects the personal assets of corporate directors and officers in the event of a lawsuit or other “claim” made against them for, among other things, an alleged breach of their duties in managing the organization.  D&O insurance directly covers individual directors and officers for their defense costs, judgments against … Continue Reading

D&O insurance basics (Part 1)

By Carolyn Rosenberg and Andy Moss on Posted in D&O, E&O, Professional Liability, Insurance Coverage, Insurance General, Uncategorized
This is the first of two posts discussing several major aspects of directors’ and officers’ liability (“D&O”) insurance coverage.  Companies approaching a policy renewal deadline, looking to place D&O insurance for the first time, considering increasing the size or structure of an existing D&O insurance program, or otherwise evaluating their overall risk management strategy may … Continue Reading

Join us for an on-demand webinar “What policyholders really need to know about insurance for COVID-19”

By Elizabeth F. Vieyra on Posted in Commercial General Liability, D&O, E&O, Professional Liability, Insurance Coverage, Insurance General, Property Damage & Business Interruption, Uncategorized
Reed Smith Insurance Recovery partners John Shugrue, John Ellison, Amber Finch, Richard Lewis, and Matthew Weaver offer discussion and analysis on key issues relevant to businesses seeking, or evaluating whether to seek, coverage for COVID-19 losses. This webinar is available on demand and you can register here. Here’s a brief summary of the topics addressed in … Continue Reading

Pollution exclusion should not preclude coverage for virus-related claims

By Mike Sampson on Posted in Commercial General Liability, Construction Coverage, Corporate and Transactional Insurance Coverage, Cyberliability, D&O, E&O, Professional Liability, Employment Practices Liability, Financial Insurance Coverage, Insurance Coverage, Insurance General, Insurance Insolvency & Regulatory, Insurance News of Note, London/Bermuda Arbitrations, Property Damage & Business Interruption, Uncategorized
Faced with mounting claims for insurance coverage as a result of the novel coronavirus (COVID-19) outbreak, commercial insurers are likely to search for any policy provision that they think will enable them to avoid paying virus-related claims.  One provision that insurers ultimately may invoke in an attempt to deny such claims is the so-called “pollution … Continue Reading

Artificial Intelligence: The New Frontier for Assessing Insurance Coverage

By Emily Garrison, Andy Moss, Cristina Shea and Shruti Engstrom on Posted in Cyberliability, D&O, E&O, Professional Liability, Insurance Coverage, Insurance General, Insurance News of Note
U.S. and international businesses are accelerating their use of artificial intelligence (AI)[1] at an unprecedented rate. The second AI Index Report published in December 2018 by a Stanford University-led group concluded that “AI activity is increasing nearly everywhere and technological performance is improving across the board.” The AI Index Report further found that “the number … Continue Reading

CannaBeware: Make sure insurance actually covers the risks your business faces

By Mike Sampson on Posted in Commercial General Liability, Corporate and Transactional Insurance Coverage, D&O, E&O, Professional Liability, Insurance Coverage, Insurance General, Insurance News of Note, Property Damage & Business Interruption
It should go without saying that when a business purchases any insurance policy – including, but not limited to, a commercial general liability (CGL) insurance policy – the business expects the policy to provide coverage for its line of business and the specific risks it faces. Cannabis-related businesses are no different. However, they must be … Continue Reading

Beware the Fine (Thumb) Print: Insurance Coverage for Class Actions Under the Illinois Biometric Information Privacy Act, and Similar Biometric Privacy Statutes

By Andy Moss, David Cummings, Robert Deegan and Michael Galibois on Posted in Cyberliability, D&O, E&O, Professional Liability, Employment Practices Liability, Insurance Coverage, Insurance News of Note
Since July 2017, national, regional and local businesses operating in Illinois have been hit with a virtual storm of class actions under the Illinois Biometrics Privacy Act (“BIPA”), 740 ILCS 14 et seq.  BIPA regulates how businesses may record and store biometric data from customers or employees, and these actions create the potential for significant … Continue Reading

When Assessing Insurance Needs, Medical-Marijuana Dispensaries Must Consider Pennsylvania Regulations

By Mike Sampson on Posted in Commercial General Liability, D&O, E&O, Professional Liability, Insurance Coverage, Insurance General, Insurance Insolvency & Regulatory, Insurance News of Note
Pennsylvania’s burgeoning medical-marijuana industry is and will be carefully regulated. When purchasing insurance, medical-marijuana dispensaries should pay careful attention to the Commonwealth’s regulations, in particular to the regulations relating specifically to dispensaries. Pennsylvania’s medical-marijuana regulations are only temporary, and most of them (including the ones relating to dispensaries) will expire in 2018 Certain of those … Continue Reading

Reps & Warranties Insurance Case Highlights the Need for New Expertise and Old-Time Common Sense

By Kit Chaskin on Posted in Corporate and Transactional Insurance Coverage, D&O, E&O, Professional Liability, Insurance Coverage, Insurance General
A rare lawsuit concerning coverage under a reps & warranties policy presents two issues of interest to M&A lawyers: If the insured under a reps & warranties insurance policy fails to obtain the insurer’s consent to a settlement, coverage for that settlement is forfeited, even if the settlement was “panicked” and on a short timeframe. … Continue Reading

Schrödinger’s Coverage: When a Risk is Covered and Not Covered by Insurance

By Andy Moss on Posted in Commercial General Liability, Cyberliability, D&O, E&O, Professional Liability, Employment Practices Liability, Financial Insurance Coverage, Insurance Coverage, Insurance General, Property Damage & Business Interruption
When is a person an “employee” under one insurance policy but not an employee under another?   Conflicting or inconsistent definitions across multiple policy lines issued to the same company can give rise to significant gaps in insurance coverage, as a recent opinion of the U.S. Court of Appeals for the Seventh Circuit instructs, Telamon Corp. … Continue Reading

‘Sorry, But You Have Nothing in Common’: The New York Court of Appeals’ Recent Rejection of the ‘Common Interest Doctrine’ Outside the Context of Litigation

By Jay M. Levin, Ann Kramer, Andy Moss, Anthony B. Crawford, Patrick T. Rowe and Ryan A. Green on Posted in Commercial General Liability, Corporate and Transactional Insurance Coverage, Cyberliability, D&O, E&O, Professional Liability, Insurance General, Insurance News of Note
The New York Court of Appeals, the state’s highest court, recently rejected an attempt to apply the “common interest doctrine,” an exception to the general rule that communicating privileged information to a third party waives the attorney-client privilege, to situations where separately represented parties communicate attorney-client privileged information in connection with transactions or other circumstances … Continue Reading

Companies can insure against cyber ransom

By Andy Moss on Posted in Cyberliability, D&O, E&O, Professional Liability, Insurance Coverage, Insurance General, Insurance News of Note
National Public Radio and other news outlets are reporting that a Los Angeles-area hospital recently paid a $17,000 ransom (in the form of 40 bitcoins) to hackers to unencrypt its computer networks, which had been held hostage after “ransomware” was introduced into the hospital’s network. Ransomware is a form of malicious software, or “malware,” that encrypts … Continue Reading

Insurance Coverage for Statutory Damages Under Professional Liability Policies

By Tim Law and Miranda Jannuzzi on Posted in D&O, E&O, Professional Liability, Insurance Coverage, Insurance General, Insurance News of Note
Increasingly, companies are being named as defendants in putative class actions, like those brought under the Fair Credit Reporting Act and Telephone Consumer Protection Act, involving violations of statutes that contain provisions mandating certain damages or ranges of damages. One question raised is whether “statutory damages” are uncovered “fines” or “penalties,” or whether they are … Continue Reading
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