|  | | 2008 News and Press Releases | | |
HEADLINE NEWS:
D&O Insurance: Policy Wordings, Exclusionary Preambles and Securities Claims
Kevin LaCroix
The D & O Diary. November 30, 2008
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EXCERPT: A recent appellate court opinion interpreting a D&O liability insurance policy securities exclusion carries some important reminders both about policy wording precision and about exclusionary language, and also raises some critical questions about the scope of coverage for securities claims generally. In an October 27, 2008 opinion, the Eighth Circuit, applying Minnesota law, held in the In re SRC Holding Corp. case that there is no coverage under a D&O liability insurance policy containing a securities claims exclusion for claims made against a financial services company and certain of its directors and officer for alleged wrongful acts in connection with the company’s underwriting and sale of certain municipal bonds. […] The carrier relied on Endorsement No. 3 to the policy, which provides that: In consideration of the premium charged, this Policy does not apply to any Claim based on, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving any actual or alleged violation of: (1) the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, any other federal law, rule or regulation with respect to the regulation of securities, any rules or regulations of the United States Securities and Exchange Commission, or any amendment of such laws, rules or regulations; or (2) any state securities or "Blue Sky" laws or rules or regulations or any amendment of such laws, rules or regulations; or (3) any provision of the common law imposing liability in connection with the offer, sale or purchase of securities. |
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