Effect of Professional Services Exclusion on D&O Policy: Joint, Not Several, Liability

A defunct law firm's bankruptcy trustee, who became assignee of the insured bank and its executives pursuant to settlement, sued the bank's primary and excess D & O insurers. The suit alleged breach of contract and bad faith after the insurers denied coverage for claims in an underlying action against the insureds for their alleged involvement in a Ponzi scheme operated by the law firm's chief executive officer (CEO). The lawyer was sentenced to more than two years in prison, and the executives of the bank that managed the law firm’s accounts were named in litigation seeking to recover the losses perpetrated by the Ponzi scheme...Click here to read the full article!