In a favorable decision for policyholders, on January 5, 2026, the Delaware Superior Court held that a Civil Investigative Demand (“CID”) issued by the Department of Justice (“DOJ”) met the definition of a “Claim” (not merely the definition of “Governmental Investigation”) under an errors and omissions policy, as the CID intended to hold Cigna responsible for a “Wrongful Act,” thus satisfying the definition of “Claim.” The Superior Court’s decision in The Cigna Group v. XL Specialty Insurance, Docket No. N23C-03-009 (Del. Super. Ct. Jan. 5, 2026) is significant for policyholders because insurers frequently argue that a CID is merely a governmental probe or investigatory tool, not an allegation of wrongdoing, and therefore does not trigger coverage, or triggers only a sub-limited portion of the coverage. Further, the Court clarified that the existence of government investigation coverage in the same policy—which is often more limited than coverage for a “Claim”—does not automatically limit CID response costs to the policy’s investigation coverage. As a result, policyholders may have a stronger basis to seek coverage for responding to CIDs and similar government demands, even when the policy expressly precludes or limits government investigation expenses.
Cigna’s Insurance Claim for CID Response Costs
In April 2016, in connection with litigation against United Healthcare, DOJ took the position that it considered “one-way chart reviews” by Medicare Advantage Organizations (“MAOs”) to violate the False Claims Act (“FCA”) because they were solely a means to find information to increase government reimbursement, without accounting for information that could decrease payments.1 The Ninth Circuit subsequently confirmed the viability of this enforcement theory.2 DOJ then began issuing CIDs to MAOs, including plaintiff Cigna, which received the first of several CIDs in 2016 (collectively, the “CIDs”). Cigna notified its insurers of the CIDs and sought coverage for its defense costs under its Managed Care Errors & Omissions insurance tower, which included a primary policy issued by ACE American Insurance Company (“ACE”) and excess policies issued by XL Specialty Insurance Company and Ironshore Specialty Insurance Company that followed form to the primary policy (collectively, the “Policy”). ACE initially denied coverage, classifying the CIDs as a “Governmental Investigation” rather than a “Claim,” where the Policy provided no coverage for “Governmental Investigations.” Although ACE later reversed its position and agreed to provide coverage, the excess insurers continued to deny coverage, prompting Cigna to file suit in March 2023.
The parties filed motions for summary judgment focused on the question of whether the CIDs constituted a “Claim” under the policy. Cigna argued that the CIDs were written notices intended to hold it responsible for a “Wrongful Act,” specifically, alleged one-way chart reviews. Cigna cited the language of the CIDs, DOJ’s enforcement actions against other MAOs regarding one-way chart reviews, and the tolling agreement Cigna entered into with DOJ as evidence of DOJ’s intent. Cigna further maintained that its interpretation would not render the Policy’s “Governmental Investigation” provisions superfluous, as some CIDs could still fall outside the definition of a “Claim.” The excess insurers countered that the Policy terms were unambiguous and that the CIDs did not convey an intent to hold Cigna responsible for a “Wrongful Act,” but instead served as requests for information as part of a governmental probe. They also argued that the “Governmental Investigation” provisions expressly excluded coverage for expenses incurred in responding to a CID unless it later resulted in a covered “Claim.”
The Delaware Superior Court Holds That CIDs Constitute a “Claim”
The parties agreed that the sole question then before the Court was whether the CIDs evidenced an intent to hold Cigna responsible for alleged one-way chart reviews under the FCA. Cigna, slip op. at 17. The Delaware Superior Court sided with Cigna, finding that the CIDs were entitled to coverage as a “Claim” under the Policy.
In reaching its decision, the Court relied on its reasoning in Conduent State Healthcare, LLC v. AIG Specialty Ins. Co., 2019 WL 2612829 (Del. Super. June 24, 2019), where it examined whether a CID constituted a “Claim” under an insurance policy. Id. at 18-20. In Conduent, the Court emphasized the importance of evaluating the specific language and context of a CID to determine whether it reflects an intent to hold the recipient responsible for alleged wrongdoing, as opposed to merely gathering information. Id. at 18-19. Applying this framework, the Court found that the CIDs issued to Cigna were not routine or composed of generic requests, but rather targeted demands focused on Cigna’s alleged one-way chart review practices. Id. at 19-20. The Court further noted that, because a government authority vested with inherent police powers issued the CIDs, Cigna could not simply decline to respond without risking sanctions or other adverse consequences. Id. at 19. As such, the Court held that (1) when a CID is directed at the policyholder’s own conduct, (2) references potential statutory violations, and (3) is backed by the government’s enforcement authority, it demonstrates an intent to hold the recipient responsible for the alleged misconduct and can rise to the level of a “Claim” for purposes of coverage under an insurance policy. Id. at 19-20. The Court noted that this approach is consistent with Delaware law, which recognizes that when a CID targets specific alleged wrongdoing by the policyholder, the concept of investigating an alleged unlawful act versus alleging an unlawful act is “a distinction without a difference” for purposes of triggering coverage. Id. at 19-20.
The Court also considered, and rejected, the carriers’ argument that the CIDs should be characterized solely as a “Governmental Investigation” under the policy, rather than a “Claim.” Id. at 20-21. The Court distinguished between CIDs issued to a policyholder where the government’s focus is on the policyholder’s alleged misconduct and potential liability and CIDs issued to a policyholder for purely informational purposes (e.g., in connection with an inquiry into an unrelated entity’s potential wrongdoing, for which the policyholder possesses relevant information), which would not rise to the level of a “Claim” but would instead fall within the “Governmental Investigation” definition. Id.
Ultimately, the Court concluded that the CIDs issued to Cigna were targeted demands investigating Cigna’s alleged FCA violations and therefore met the Policy’s definition of a “Claim,” entitling Cigna to seek reimbursement for its defense costs. Id. at 21-22.
Anticipated Impact of Cigna Decision for Policyholders
The Cigna decision is significant for policyholders because it rejects the traditional narrow insurer interpretation that a document initiating a governmental investigation must specifically allege “Wrongful Acts” against an insured to trigger coverage. Policyholders may look to this decision as support for insurance coverage not only for CIDs, but also for subpoenas and other similar documents requiring the recipient to provide documents or information in connection with a governmental inquiry. The scope of coverage under any insurance policy must be determined under the specific wording of that policy, but the Cigna holding has the potential to be applied in policyholders’ favor under several different lines of coverage, including directors’ and officers,’ errors and omissions, cyber, and other liability policies.
