Steve Goldberg: “Insurers Too Often Want to Weasel Out of the D&O Insurance They Sold.”
Should this be the new corporate mascot for insurance companies? The weasel? Maybe so, based on the title of my colleague, Steve Goldberg’s post: “Insurers Too Often Want to Weasel Out of the D&O Insurance They Sold.”
Steve explains over at the Catastrophic Insurance Coverage blog that “Fortunately, [insurance companies] don’t always succeed, as evidenced by the recent decision discussed below.”
In his post, Steve gives a nice analysis about some of the arguments that insurance companies make when trying to deny coverage for D&O claims. Steve starts out by explaining:
One of the many ways that some insurance companies try to avoid honoring their obligations under D&O insurance policies is to claim that one of the many insureds included within the coverage of the policy took some action that assisted the plaintiffs in the lawsuit against the company and its directors and officers. In doing so, they rely upon the insured vs. insured exclusion. That exclusion is frequently called by way of shorthand the IVI exclusion.
The line from Steve’s post that struck me as most important for corporate policyholders, directors, and officers to keep in mind is:
The moral of these two cases is simple: when the stakes are high, as they most always are in these types of D&O coverage disputes, an insured needs to be ever vigilant and perhaps aggressive when dealing with its carriers as the carriers will often themselves be quite aggressive in seeking to deny coverage.
Steve goes on to discuss recent authority in which courts refused to let insurance companies weasel out of their D&O policy obligations. It’s worth clicking over to Steve’s blog, the Catastrophic Insurance Blog, and giving the piece a read.
And if you haven’t already added Steve’s feed to your newsreader, here’s the link to do so. I added the feed to my Google Reader subscription list as soon as I saw the blog go live. You can also add the feed for the Corporate Insurance Blog to your newsreader by clicking here.
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Some companies will try to weasel out of anything expensive. That’s why it’s critical to find a GOOD company when shopping for insurance, not just a cheap one. Great post Scott.