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Article Explores Extent of D&O Insurance Coverage, Recent Legal, Regulatory Actions

Understanding insurance policy language remains particularly important for directors and officers in the financial services industry as policy terms continue to evolve in meaning and application, write lawyers from Alston & Bird. An article in Law360 discusses recent lawsuits and regulatory actions involving insurers that raise questions such as: whether D&O policies cover costs incurred in responding to informal regulatory inquiries; whether an ongoing government investigation constitutes a “claim” and whether such investigations are ineligible for coverage under certain circumstances. The article also discusses coverage exclusions for losses arising out of the performance of professional services; coverage exclusions for fraud; and cyber liability and privacy coverage terms. The authors note that while complex, many of the terms and features of insurance coverage can be negotiated with D&O insurance providers, and that firms should consider working with insurance brokers and attorneys who specialize in D&O insurance in the financial services industry to assist them in the negotiating process.