The U.S. Court of Appeals for the Second Circuit, applying
Kentucky law, has held that a D&O policy's insured v.
insured exclusion barred coverage for a lawsuit brought by a
non-insured entity and other insured persons. Gregory v.
Navigators Ins. Co., 2023 WL 8538173 (2d Cir. Dec. 11,
2023).
Two employees of a farm and ranch equipment manufacturer were
sued by a non-insured entity and several founding members of the
manufacturer. The employees sought coverage under the
manufacturer's directors and officers policy. The insurer
denied coverage based on the policy's insured v. insured
exclusion, and the employees separately sued for coverage in New
York and Kentucky federal district court, respectively. Both
district courts concluded that the insured v. insured exclusion
barred coverage, and both employees appealed.
