In March 2023 the Australian Federal Court found that a claim had first been made against a director when an email was sent to his address but allegedly not read by him till much later. A “claim” made against the director under the claims occurring policy was the “written notice received by a director for
In this judgment, the relevant insurers relied on a limitation defence against the insured’s claims. All the parties agreed that the claim was in contract and had a limitation period of 6 years under the relevant legislation.
The question was the accrual date of the insured’s cause of action.
The court confirmed that the
The existence or absence of sound corporate governance has always been a factor when underwriting a D & O risk.
Sound governance includes sound ESG practices.
It is becoming standard for D & O underwriters to undertake an ESG analysis as part of the underwriting process so that underwriters can achieve as much comfort as
The bump-up exclusion in a D&O policy excluded claims ‘alleging that the price paid … for the acquisition … of an entity is inadequate’. The insurers do not have to pay any amount due under a judgment or settlement representing the amount by which the price or consideration would be effectively increased. This is to
At common law when a wrong is done to a company only the company can sue for the damage caused to it.
That does not mean that the shareholders of the company may not consequentially suffer any loss (what is known as a reflective loss). Any negative impact the wrongdoing has on the company is
State capture, growing public discontent fuelled by social media at the activities of private companies and the need for ethical business practices all present significant implications for directors and for insurers who provide directors and officers liability insurance.
Increased scrutiny by regulators and industry watchdogs into the affairs of companies and the conduct of their
A California company specialising in plumbing fixtures unsuccessfully sought cover under a directors and officers policy for a claim brought by three former directors based on the decline of the business because of the chief executive’s erratic behaviour.
The court held that the so-called ‘insured-v-insured’ exclusion unambiguously bars coverage for a claim such as that
The August 2016 first-of-its-kind judgment against South African Airways in favour of Nationwide Airlines, for damages arising from conduct that was held to be an anti-competitive exclusionary act preventing Nationwide from entering into or expanding within the travel market, raises the interesting question whether the loss is insurable by the company and the directors.
In the USA a directors and officers policy issued to a man who later pleaded guilty to selling $1.9 million in phony stock was voided for non-disclosure.
The policy taken out and renewed included a policy application where the director stated he was unaware of any acts, errors or omissions that may be grounds for