Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Personal Conduct Exclusions in D&O Policies: The Limited Reach
Virtually every directors' and officers' ('D&O') insurance policy contains personal conduct exclusions. Insurers frequently rely on such exclusions to deny or limit coverage. For example, in many of the recent claims involving financial restatements or stock options, D&O insurers have asserted that the personal conduct exclusions, such as those relating to illegal profit, deliberate fraud, and deliberate criminal acts, diminish or preclude coverage. Although insurers frequently rely on these personal conduct exclusions, the personal conduct exclusions are, in practice, limited in scope and application. This article highlights some of the key limitations.
Personal conduct exclusions are often invoked to avoid coverage for any type of illegal conduct. A few examples of 'personal conduct' exclusions are:
The Insurer shall not be liable to make any payment for Loss in connection with any Claim made against an Insured:
(a) arising out of, based upon or attributable to the gaining in fact of any profit or advantage to which the Insured was not legally entitled;
(b) arising out of, based upon or attributable to payments to an Insured of any remuneration without the previous approval of the shareholders or members of an Organization, which payment without such previous approval shall be held to have been illegal;
(c) arising out of, based upon or attributable to the committing in fact of any deliberate criminal or deliberate fraudulent act by the Insured …
In analyzing these exclusions, one should consider whether the exclusions are being asserted in the context of the insurer's defense obligation or indemnity obligation.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.