Dan Struck, a partner in Culhane Meadows’ Chicago office, recently wrote a piece titled “Insured Capacity: Owner-Designee Directors Should Not Take Their D&O Coverage for Granted” for a Wiley publication called Board Leadership in which he covered some of the intricacies of directors & operators insurance.
Here’s an excerpt from Dan’s piece:
Directors and officers liability (D&O) insurance is an important business asset, with considerable value both for the insured entity and individual insureds. Directors and officers assume that D&O policies will cover them, even if they are not indemnified by the company, in the event of a claim alleging they committed a wrongful act, error, or omission, or otherwise committed some breach in the course of carrying out their duties. As a backstop for what are often high-stakes claims—claims that are costly to defend and can, on occasion, expose the directors and officers of an insured business to personal liability—the terms and conditions of D&O policies have significant legal and financial consequences. But the terms of standard D&O policy forms do not always keep pace with business developments or the changing liability landscape. Unfortunately, all too often there is a gulf between the scrutiny afforded to insurance coverage terms and the potential significance of those terms for coverage. But seemingly minor variations in basic policy terms and conditions can significantly alter the outcome of a claim for coverage.
The complete article can be found here.