Travelers Casualty and Surety Company

Does the term “wrongful act” always require that the conduct at issue be “wrongful”? In at least one D&O insurance policy, the answer may not be as clear as it seems. A federal district court in Texas recently denied an insurer’s motion to dismiss a company’s coverage claim for nearly $5 million in costs the company incurred defending a statutory appraisal lawsuit filed by disgruntled shareholders, citing the D&O policy’s “terribly” written definition of “wrongful act,” which may have been written so broadly that it provides coverage for “acts” that are not actually “wrongful.”
Continue Reading Imprecise Policy Wording Prevents Dismissal of D&O Coverage Suit For Statutory Appraisal Claims