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D&O Insurance Cases to Watch in 2022


Insurance coverage battles involving special-purpose acquisition companies, the Seventh Circuit's take on False Claims Act-related coverage disputes and the Delaware high court's take on whether appraisal actions are securities claims have set up 2022 as another big year for director and officer insurance rulings.

Here, Law360 breaks down top D&O insurance cases and trends to watch this year.


Pandemic Coverage Under D&O Policies

COVID-19-related loss claims have focused mostly on business interruption coverage in property policies to this point. However, that trend has started to change. An ongoing case in Northern District of Illinois shows D&O policies may also be implicated for pandemic-related losses. COVID-19 is the respiratory ailment caused by the coronavirus.

The Illinois federal court said in October that a Chubb unit can't avoid coverage for a health consulting company's underlying settlement over a pandemic trade show cancellation.

"This is the first time I've seen anybody try to get D&O coverage for COVID-19 cancellation" and be given the green light to proceed, said Jared Zola, a partner at Blank Rome LLP who represents policyholders.

This case is worth watching because "property and business interruption coverage are not the only policies that are going to apply to COVID-19-related losses," Zola said. "Here you had a court that actually said this case is going to go forward under a D&O policy."

D&O policies don't have virus exclusions like property policies often do, he said.

"Policyholders need to be really careful to make sure that they're looking at potential coverage under all of their policies, even the ones that don't seem as likely," Zola said.

The case is Federal Insurance Company et al. v. Healthcare Information and Management Systems Society, Inc., case number 1:20-cv-06797, in the Northern District of Illinois.

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“D&O Insurance Cases to Watch in 2022,” by Daphne Zhang was published in Law360 on January 3, 2022.