Directors and Officers (“D&O”) insurance
policies have been written on a claims-made basis for decades.
Because of the nature of claim-made policies, D&O policies
often have provisions addressing prior claims and the relationship
between similar allegations in pending claims. D&O policies
also often have exclusions for prior and/or pending litigation.
These provisions address the circumstances where multiple claims
may be brought over time arising from the same set of facts. In a
recent case, the Fifth Circuit addressed these provisions along
with the provision requiring the policyholder to provide prompt
notice of a claim.
In ADI Worldlink, L.L.C. v. RSUI Indemnity
Co., No. 17-41050 (5th Cir. Aug. 2, 2019), the
policyholder had annual D&O coverage for several years.
Multiple claims were brought against the policyholder concerning
its failure to pay overtime wages to nonexempt employees. The
policyholder failed to give notice to the insurance company of the
first
