As in prior years, Edwards Angell Palmer & Dodge LLP is live blogging from the PLUS D&O Symposium. There were several interesting points discussed during the third panel discussion, including the following:
- The definition of the term “Claim”has evolved recently in a way that is more favorable to policyholders. Claim has been expanded in many policies to include investigations of insured persons and insured entities by regulatory bodies. Claim also frequently encompasses pre-claim inquiries from investigative agencies seeking documents or testimony from insureds. While the broader coverage tends to favor policyholders, it also places a greater burden on policyholders to comply with the policy's notice provisions. Insurers, however, are relying on notice provisions to deny coverage.
- A developing trend is for policyholders to attempt to negotiate terms in policies seeking to soften notice provisions with respect to coverage for pre-claim inquiries.
- Insured v. Insured exclusions have undergone significant changes in last twelve months. They are now frequently written to apply only to claims brought by or on behalf of the insured entity and no longer apply to claims brought by or on behalf of insured persons (i.e., E-v-I). For example, this will have an impact in cases where the claimant is a former director or officer and a current shareholder; where coverage for such claims was frequently precluded in past under the I-v-I exclusion it may now be covered by the policy given the terms of the E-v-I exclusion.
- The frequency of M&A suits is on the rise, currently comprising about one-third of 2010's securities litigation.
- Issues concerning Bump Up exclusions have not been resolved, but the industry is moving towards removing them from policies.
- The issue of where excess insurers attach is also developing. For example, if the primary layer of $10 million limits is paid $7.5 million by the primary insurer and $2.5 million by the entity, will excess insurers deem that as exhaustion so long as the $10 million represents actual Loss?