Favorable Decision Obtained in Multiple Tower D&O Case
June 7, 2006

The Superior Court of Delaware recently entered a significant and comprehensive decision in favor of insurers, including Ohrenstein & Brown's client The Travelers Indemnity Company. This decision addressed the issues of interrelated wrongful acts and applicability of the prior notice, prior and pending litigation, and prior acts exclusions in Directors and Officers Liability policies. In her decision, Judge Jan Jurden rejected the efforts of the insured to obtain coverage under four separate towers of D&O policies issued for differing policy periods for a series of lawsuits filed over a period of several years. Specifically, Judge Jurden agreed with our client's position that no ambiguity existed in the policy provisions at issue, and held that application of the policy language necessitated a finding that coverage, if available, was only available under the first tower covering the 1997-2001 policy period.

By seeking to access coverage under the multiple towers of insurance, the insured was attempting to access over $700 million in coverage. As a result of the decision, only one tower totaling $200 million was held to be potentially available.

(Prior results do not guarantee a similar outcome.)