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Personal Conduct Exclusions in D&O Policies: The Limited Reach
Virtually every directors' and officers' ('D&O') insurance policy contains personal conduct exclusions. Insurers frequently rely on such exclusions to deny or limit coverage. For example, in many of the recent claims involving financial restatements or stock options, D&O insurers have asserted that the personal conduct exclusions, such as those relating to illegal profit, deliberate fraud, and deliberate criminal acts, diminish or preclude coverage. Although insurers frequently rely on these personal conduct exclusions, the personal conduct exclusions are, in practice, limited in scope and application. This article highlights some of the key limitations.
Personal conduct exclusions are often invoked to avoid coverage for any type of illegal conduct. A few examples of 'personal conduct' exclusions are:
The Insurer shall not be liable to make any payment for Loss in connection with any Claim made against an Insured:
(a) arising out of, based upon or attributable to the gaining in fact of any profit or advantage to which the Insured was not legally entitled;
(b) arising out of, based upon or attributable to payments to an Insured of any remuneration without the previous approval of the shareholders or members of an Organization, which payment without such previous approval shall be held to have been illegal;
(c) arising out of, based upon or attributable to the committing in fact of any deliberate criminal or deliberate fraudulent act by the Insured …
In analyzing these exclusions, one should consider whether the exclusions are being asserted in the context of the insurer's defense obligation or indemnity obligation.
Duty to Defend
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Stranger to the Deed Rule
In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.