D&O Insurance: Responding to Increased Board Accountability

Shaping Policies to Protect Directors and Officers Amid Heightened Government Enforcement and Shareholder Lawsuits

Recording of a 90-minute CLE webinar with Q&A

Conducted on Tuesday, July 8, 2008

Course Materials


Ever since Enron and Worldcom and more recent corporate scandals, including the subprime credit crisis, options backdating investigations and global climate change, the current corporate environment is not one in which directors and officers can feel safe.

Companies, their officers and their directors must be aware of the looming triple threat — SEC and DOJ investigations, shareholder class actions, and state regulatory action. To protect themselves and their officers and directors, companies turn to insurance.

The quality of D&O insurance also matters more than ever in recruiting board members. Most directors would not consider serving on a board that fails to provide comprehensive D&O coverage in addition to standard insurance packages.

Listen as our panel of insurance and corporate law specialists examines the key risk factors for directors and officers, current trends in D&O claims and litigation, and strategies to protect directors and officers through insurance coverage.



  1. Evaluating D&O coverage
    1. Liability areas that implicate coverage
    2. Coverage offered by D&O policy
    3. Dedicated Side A coverage — protects D&O personally, separate from company’s D&O policy
    4. Excess policies — are they structured to avoid claims issues?
  2. Current trends in D&O claims and litigation
    1. Shareholder derivative actions
    2. Securities class action litigation
    3. Personal contributions from D&Os
    4. What is the impact of such trends?
  3. Key terms to negotiate
    1. Claim definition — what is covered and what should be covered
    2. Rescission and severability terms
    3. Conduct exclusions
    4. Carve-outs
  4. Strategies/best practices
    1. Directors actively participate in placement of D&O insurance
    2. Pay attention to the details
    3. When negotiating D&O insurance coverage, you can benefit from getting an independent second opinion (often an attorney)
    4. When completing the application and answer a question concerning D&Os’ knowledge or information of error or omission the might give rise to a claim under the proposed policy, rephrase the question.
    5. Watch out for coverage traps


The panel reviewed these and other key questions: 

  • What are the primary risk factors for directors and officers?
  • What are the current trends in D&O claims and litigation?
  • What are the best practices to negotiate the best coverage for a company's directors & officers?
  • What are the critical factors for counsel to consider in evaluating D&O coverage?


Kimberly M. Melvin
Kimberly M. Melvin
Wiley Rein

She represents insurers on coverage issues related to professional liability coverage, including directors and...  |  Read More

Kevin M. LaCroix
Kevin M. LaCroix
OakBridge Insurance Services

He has been involved in directors’ and officers’ liability insurance issues for over 25 years. He is also...  |  Read More

Mary E. McCutcheon
Mary E. McCutcheon

Farella Braun + Martel

Ms. McCutcheon represents corporate and individual policyholders in a wide variety of insurance coverage disputes. She...  |  Read More

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