Your company’s directors and officers (D&O) liability insurance coverage is a critical resource in the event your directors and officers are named as defendants in a securities class action, derivative suit, or related regulatory investigation. Given recent market volatility and the prospect of increased securities claims and regulatory scrutiny, now may be a good time to consider updating your company’s D&O program to ensure that it affords all of the protections available in the market. This client alert briefly summarizes three D&O coverage decisions issued over the last two months, all of which demonstrate the need to pay careful attention to policy language when negotiating your D&O program or making a claim.

Fifth Circuit Decision highlights pitfalls of settling with primary carrier for less than policy limits in Citigroup Inc. v. Federal Insurance Inc., et al., No. 10-20445 (5th Cir. Aug. 5, 2011).

- Citigroup sought D&O coverage under its primary D&O policy and nine excess policies for certain underlying claims that it had settled for over $240 million, after incurring over $20 million in defense costs. The integrated D&O program provided a total of $200 million in coverage.

Please see full Alert below for further information.