D&O and Management Liability

Mission Statement
The D&O and Management Liability Committee's goal is to promote an enhanced environment for the efficient and fair resolution of D&O coverage disputes. We focus our efforts on promoting communication among D&O practitioners with a balanced perspective, especially with regard to current developments in insurance law and legal issues involved in underlying claims.   

2022-2023 Co-Chairs
Bob Allen
John Mumford

Selected Presentations & Papers:

Posted 9/28/2022

D&O Insurer Must Cover Mortgage Broker’s $15 Million Settlement of Alleged False Claims Act Violations

A Delaware court recently granted summary judgment to a mortgage broker targeted in a federal government investigation for alleged False Claims Act violations, holding that the company’s directors and officers liability (“D&O”) insurer was required to indemnify more than $15 million in settlement costs with the U.S. Department of Justice. Guaranteed Rate, Inc. v. ACE American Insurance Company, No. N20C-04-268 MMJ CCLD (Del. Super. Ct. Sept. 6, 2021). Read More.

Posted 9/26/2022

No Coverage For SEC Investigation Costs, Insurer Says

Great American Insurance Co. urged a Nevada federal court to rule that it does not have to reimburse an appliance recycling business for defense costs incurred after a U.S. Securities and Exchange Commission investigation because the SEC's actions occurred after its policy expired. Read More.

Posted 9/22/2022

Basketball Hall of Fame and Chubb Insurer Hit the Court Over D&O Coverage

The Basketball Hall of fame (BHoF) is suing Chubb Group subsidiary Federal Insurance Co. to have the insurer defend and indemnify it in a case accusing it of attempting to unlawfully secure funds for renovations to its facility. Read More.

Posted 9/14/2022

Delaware Superior Court Issues Noteworthy D&O Coverage Opinion Regarding Choice of Law, Covered Loss, Antitrust Exclusion and Fines and Penalties

Another Delaware court has issued a noteworthy management liability insurance coverage opinion. In a detailed September 12, 2022 opinion in a dispute between Godiva Chocolatier and its management liability insurers over coverage for underlying consumer protection claims against the company, Delaware Superior Court Judge Mary M. Johnston rejected many – but not all — of the insurers’ coverage defenses. Read More

Posted 8/26/2022

Interrelated Wrongful Acts: ZOOM Alleges Insurers Relied on Unstable Connection To Support Denial

Zoom Video Communications, Inc. recently filed suit against four of its insurers alleging that it is owed their policy limits due to paying over $90 million in litigation costs stemming from several underlying lawsuits -- a government investigation and subsequent lawsuit and several other private lawsuits. All of the underlying lawsuits claimed data security breaches and consumer protection violations against the company. Zoom argues that the insurers wrongfully denied coverage for these lawsuits by improperly relying on “loose” interrelated acts language in their policies.

Read more: Saxe Doernberger & Vita, P.C. ZOOM Alleges Insurers Relied on Unstable Connection To Support Denial (sdvlaw.com)

Posted 8/26/2022

11th Circuit Holds D&O Insurer Liable for $3 Million in Prejudgment Interest on Top of Policy Limits

Lloyd’s of London underwriters must pay more than $3 million in pre-judgment interest in addition to the $10 million the syndicate has already paid in damages for the wrongful acts of the former directors of a bank that was declared insolvent during the 2008 financial crisis, the 11th Circuit Court of Appeals ruled.

Read More: Lloyd’s Owes $3M in Prejudgment Interest for Late Payment of D&O Claim (claimsjournal.com)

Posted 8/17/2022

Del. Court Holds Warranty Letter Non-Disclosure of SEC Inquiry Precludes Coverage for Subsequent Claims

When a management liability insurance policyholder seeks to increase the limits of liability of their insurance program, the insurers will typically require a statement warranting that the policyholder is not aware of any facts or circumstances that could give rise to a claim. This warranty statement typically specifies that if there is a subsequent claim based on facts or circumstances of which the applicant has knowledge, the subsequent claim is precluded from coverage. This warranty exclusion is often referred to as the prior knowledge exclusion. In an interesting August 15, 2022 opinion in an insurance coverage dispute, Delaware Superior Court Judge Eric Davis held that as a result of the insured’s failure to disclose a pending SEC inquiry in a warranty letter, the prior knowledge exclusion in the letter precluded coverage for the underlying matters. Read more

Posted 01/03/2022

The D&O Diary Guest Post: Avoiding Bumps in the Road to Coverage: Limitations on the “Bump-Up Exclusion” co-authored by Fellow Barry Buchman (Haynes & Boone in DC) 12/28/2021.

Past Co-Chairs

John Mumford
Joann Lytle

John Mumford
Joann Lytle

Michael Manire
Seth Lamden

Michael Manire
Mitchell Dolin

2017-2018 Co-Chairs
Michael Manire
Mitchell Dolin

Michael Manire
Mitchell Dolin