Backdating claim director face insurers officer
The wave of litigation from the subprime mortgage meltdown is striking not just lenders and financial institutions but also professional service firms and diverse companies holding mortgage related investments.
Defendants in such litigation should be prepared to face opposition from insurers, who will likely assert a variety of coverage defenses and exclusions.
Companies can take measures, however, to maximize their chances of recovering some or all of their defense costs and potential losses from insurance carriers.
Many of these issues will likely be the same as the ones that have occurred in connection with prior types of securities litigation, including the options-backdating lawsuits and suits arising out of the savings and loan crisis.
Their resolution, however, may be different in this context. D&O and E&O policies typically exclude from coverage liability based on fraud, criminal acts, or intentional misconduct by the insureds.
Of course, given the broader economic troubles, there also has been an increase in the number of litigation matters being pursued in bankruptcy courts.