The subprime mortgage crisis implicates billions of dollars in
directors and officers insurance coverage. Naturally, insurance
companies will, in many instances, argue that directors and
officers insurance coverage does not exist under several exclusions
typically contained in a directors and officers (D&O) policy.
What should not be lost in the brewing debate is that this war was
fought before — during the battles for directors and
officers coverage arising from the savings and loan (S&L)
crisis — and many of the issues raised then are likely to
be raised again.
Strictly from an insurance coverage perspective, there are many
similarities between the current subprime mortgage crisis and the
S&L crisis of the 1980s. And although the dynamics of the
subprime liability litigation are evolving, much of the same policy
language and many of the same exclusions will likely play an
important role. There are, however, some notable differences.
