Directors & Officer’s Liability Insurance Claims
Directors and Officer’s liability insurance (“D&O insurance”) typically covers a company’s former and current directors and officers, and usually the corporate entity itself, for defense fees and costs and damages incurred in connection with lawsuits alleging they committed wrongful acts or omissions while acting in their capacity as directors and officers for the company. D&O insurance policies may also cover defense fees and costs incurred in connection with criminal and regulatory investigations and lawsuits. Potentially covered D&O insurance claims include claims made by shareholders—individually and on behalf of the company in shareholder-derivative actions, customers, regulators, and competitors (e.g., for anti-trust or unfair trade practice allegations).
Directors & Officer’s Liability Insurance Bad Faith Claims Denials
Unlike commercial general liability insurance, which is typically written on standardized policy forms, D&O policy forms vary from insurer to insurer and from industry to industry, which can often drive up legal fees and costs necessary to resolve disputes between insureds and their D&O insurers. Although D&O insurers may not have a duty to defend, D&O policies often cover defense costs. Whether and when a D&O insurer must advance defense costs—that is, pay them as they are incurred—often give rise to disputes. Moreover, most D&O policies are “self-consuming,” (i.e., payment of defense fees and costs reduces the amount of insurance coverage remaining to settle or pay judgments.) Insurance companies often take advantage of the complexity of their own policies and issue improper denials, especially when they rely on policy exclusions. It is crucial to retain an experienced attorney to assist you regarding your disputes with insurance companies.
Recovery and Damages for Directors & Officer’s Liability Insurance Claims Denials
California law imposes, on every insurance contract, the implied covenant of good faith and fair dealing, more commonly known as insurance bad faith. Additionally, most D&O policies require that an allocation be made with respect to covered or potentially covered claims and those that are not. D&O insurers on occasion will delay or withhold crucial defense payments to an insured during the course of “investigating” these issues. If an insurer unreasonably and without proper cause denies an insurance claim, refuses to cover an insureds’ defense or refuses to conduct a reasonable investigation in bad faith, a D&O policyholder may sue for policy benefits due under the policy, “consequential damages” that are caused by the bad faith conduct, emotional distress, punitive damages, attorneys’ fees and interest on past-due benefits (typically at California’s legal rate of 10%). D&O insurance policy denials are on the rise as companies seek to avoid losses in expensive business litigation cases.
Directors & Officer’s Liability Insurance Bad Faith Claims Denial Experience
McKennon Law Group has experience in litigating and resolving D&O insurance claim disputes for policyholders. We have litigated and been consulted on hundreds of D&O, ERISA insurance, disability insurance, life insurance, health insurance, insurance bad faith and other insurance matters. Because of our aggressive advocacy and our reputation as a leading California insurance litigation firm, we are able to achieve maximum settlements and judgments/verdicts at trial.
We have been litigating D&O liability, ERISA insurance, disability insurance, life insurance, property & casualty, bad faith and other insurance matters since 1986. Our attorneys are nationally recognized experts in insurance bad faith litigation and have chaired numerous seminars and written numerous articles dealing with insurance bad faith claim issues. Our attorneys are top rated by all major peer review rating agencies and have been honored to receive numerous prestigious awards and recognitions. No attorneys in California or anywhere in the United States are better suited to litigate your insurance bad faith claims. In fact, the attorneys of the McKennon Law Group previously represented the insurance companies that denied such claims and thus have the broadest possible experience in litigating these types of insurance disputes. We can and will aggressively litigate your case to achieve maximum success. We have significant trial experience and we are not afraid to go to trial against the big insurance companies.
Contact us to schedule a free initial consultation regarding your insurance claim or litigation matter.