The New York Supreme Court, Appellate Division, has held that a
"prior acts" exclusion in a directors and officers policy
did not bar coverage for settlements reached by the insured in two
related shareholder lawsuits, notwithstanding allegations related
to a joint venture formed before the prior acts date. Xerox
v. Travelers Cas. & Sur. Co. of Am., 2024 WL 1161218 (N.Y.
App. Div. Mar. 19, 2024).
The insured technology company had two towers of D&O
insurance. The first tower consisted of "run off"
policies that explicitly barred coverage for wrongful acts
committed or allegedly committed on or after January 1, 2017. The
policies in the second tower included a prior acts exclusion that
precluded coverage for any "Claim ... based upon, arising
from, or in consequence of any fact, circumstance or Wrongful Act
committed, attempted, or allegedly committed or attempted in whole
or in part prior to January 1, 2017."
