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The Biggest D&O Liability Insurance Rulings of 2021


A slew of policyholder-friendly rulings from Delaware, New York's highest court siding with J.P. Morgan in its $140 million SEC settlement coverage dispute, and the rise of litigation over the "bump-up" exclusion's impact on mergers have made 2021 a big year for directors and officers insurance guidance.


Courts Further Clarify 'Securities Claim' Definition

Courts this year also shed more light on the definition of securities claims and their insurability.

In October, Calamos Asset Management convinced a Delaware federal court that an underlying $22 million investor class settlement involves covered wrongful acts against its directors, after the court had previously reversed course from a ruling fully siding with insurer Travelers and tossing the case in February.

The judge sided with the insurer that the stockholder litigation did not involve securities regulation as required by the policy.

Jared Zola, an insurance recovery partner at Blank Rome LLP who represents policyholders, said the decision "really narrows the potential scope of damages down to a much smaller claim than it otherwise could have been based on applying the relative exposure rule of allocation."

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“The Biggest D&O Liability Insurance Rulings Of 2021,” by Daphne Zhang was published in Law360 on December 17, 2021.