Better Late Than Never? Not So For Directors' And Officers' Liability Coverage

Directors and officers facing liability claims, including investigations and enforcement proceedings, must pay careful attention to the notice provisions of their directors' and officers' (D&O) liability coverage policies and ensure that they report claims to their insurer in a timely manner. As a recent decision of the Court of Appeal for Ontario confirms, the failure to do so can result in coverage being denied.

Key Takeaways

• Depending upon the wording of the policy, the requirement to provide notice of a claim to an insurer during the policy period can constitute a condition precedent to D&O coverage written on a claims-made basis. This is different from a policy written on an occurrence basis, which provides coverage for incidents that take place during the policy period, regardless of when the claim is brought.