We have been long-time advocates of tougher standards from D&O insurers, and of discounts on premiums for companies with exemplary governance.

Insurers are taking a “really strict” view of claims and what is covered by a D&O policy, according to Jared Zola, a partner in Blank Rome’s policyholder-only insurance practice.

There tend to be very clear examples of what constitutes a covered claim under a D&O policy, Zola said, such as service of a securities litigation complaint. Questions are now arising when a policyholder receives or is served with a subpoena, such as a grand jury subpoena, a request for documents or a search warrant, he noted. “I’m finding that insurers, with a much higher frequency, are taking the position that the receipt of those subpoenas is not a claim because the definition of a claim does not expressly list a subpoena or search warrant as one of the categories that constitutes a claim,” he said. “I personally have seen a dozen of these cases in the last 21 months, and before this, we hadn’t seen it in years,” Zola said, adding that the costs of such a denial can reach into the millions of dollars for companies.

Agenda – Millions of Dollars on the Line as Insurers Deny D&O Claims