The D&O insurance implications of M&A litigation often extend beyond claims against the company and its directors and officers. When financial advisers are drawn into transaction-related litigation, companies that have agreed to indemnify them may be required to reimburse defense costs and settlement payments, raising questions about the extent to which those amounts could be covered under a public company D&O insurance program.

A pending coverage dispute arising out of Cornerstone Building Brands’ 2022 take-private transaction highlights those issues. At the center of the dispute is whether amounts a company pays to indemnify its financial adviser for defense costs and settlement payments constitute covered Loss under a public-company D&O policy.  Below is a discussion of Cornerstone’s coverage complaint, the parties’ competing summary judgment arguments, and potential D&O underwriting implications.

Continue Reading Coverage Dispute Tests Limits of Side C Coverage

In the following guest post, Javier Ybarra, Oswald Carvalho, and Sofia Garcia-Ollauri, all of Marsh Spain, consider a special feature of D&O insurance in Spain. Spain’s legal system allows civil damage claims to be pursued within criminal proceedings, which can lead courts to require directors and officers to post civil or bail bonds (“fianzas”) before liability is finally determined. As the authors discuss below, D&O insurers in Spain may be expected to provide or support these bonds, and companies with Spanish operations should ensure their D&O policies explicitly address bond coverage, reimbursement obligations, and related collateral requirements. Our thanks to the authors for allowing us to publish their article as a guest post on this site. Here is the authors’ article.

Continue Reading Guest Post: Are D&O Insurers Expected to Act as a “Bondsman” in Spain?

In a recent post (here), I wrote about a lawsuit that had just been filed against Microsoft’s board, alleging that the company’s directors had violated their fiduciary duties by knowingly allowing its AI development efforts to engage in copyright infringement. The case, I said, represented an example of “silent AI” – that is, the seepage of AI-related matters into various insurance coverages that were not consciously intended to provide coverage for certain exposures. The case showed how a matter that would not typically be covered under a D&O policy (copyright infringement) can translate into a potentially covered matter (a breach of fiduciary duty lawsuit).

In the latest example of this kind of lawsuit, a plaintiff shareholder has filed a derivative lawsuit against the board of Nvidia, alleging that its directors knowingly permitted its AI models to violate copyright holders’ rights and allowed violations of the Illinois Biometric Information Privacy Act (BIPA). Nvidia, the complaint alleges, has been the target of numerous copyright infringement actions, as well as class actions brought for alleged BIPA violations concerning individual voiceprints. The derivative lawsuit seeks to hold the company’s directors liable for the company’s “potentially massive liability and related costs and reputational damages” that the company faces in the underlying litigation. As discussed below, the new Nvidia derivative lawsuit, which may be found here, represents yet another example of “silent AI” in operation in the D&O context.

Continue Reading More About “Silent AI” and Follow-On D&O Litigation

As The D&O Diary has emphasized in numerous posts in recent months (most recently here), geopolitical issues represent an increasing source of D&O risk. The geopolitical issues include, among other things, sanctions, tariffs, and export controls. Another geopolitical issue that can have an impact on D&O risk is the enforcement of anti-money laundering (AML) laws. In the latest example of AML enforcement translating into D&O risk, in late July a plaintiff shareholder filed a securities class action lawsuit against British money transfer technology company Wise Group, a company whose U.S. bank charter application was denied due to AML concerns. A copy of the July 31, 2026, complaint can be found here.

Continue Reading Anti-Money Laundering Enforcement and Securities Litigation Risk

The latest episode of The D&O Diary Podcast is now available. Kevin LaCroix and Sarah Abrams are joined by their first podcast series guest, Marissa Streckfus, Vice President & Claims Manager at RT ProExec, to discuss the current private company D&O claims environment.

The conversation covers a range of topics, including private company business disputes, increasing antitrust exposures, bankruptcy-related claims, and the ways in which D&O policy structure can affect claims resolution. The episode also examines practical claims handling issues, including notice requirements, interrelated claims concerns, and other recurring coverage challenges.

Continue Reading The D&O Diary Podcast Series – Episode 5: Private Company D&O Claims
Benjamin Edwards
Nancy Rapoport

In the following guest post, Professors Benjamin Edwards and Nancy B. Rapoport, of Boyd School of Law, UNLV, present their views that a corporate law loophole in advancement and indemnification rules can force companies to pay exorbitant legal fees and even unreasonable personal expenses for directors’ defenses. The authors contend that courts should impose stricter scrutiny to prevent unethical billing practices and protect shareholders. We would like to thank Ben and Nancy for allowing us to publish their article as a guest post on this site. Here is their article.

Continue Reading Guest Post: Legal Fees and Expenses Gone Wild Thanks to a Corporate Law Loophole

Artificial intelligence-related securities litigation continues to accelerate, with plaintiffs increasingly targeting not only alleged misstatements about AI products and capabilities, but also companies’ disclosures regarding their investments in AI and the impact of those investments on business operations.  A couple of recently filed lawsuits challenge AI-related spending and capital allocation decisions, which may underscore whether growing investor scrutiny of whether management adequately disclosed the financial risks, costs, and tradeoffs associated with aggressive AI initiatives.

Continue Reading Another AI Spending-Related Securities Class Action

One of the most urgent current issues in the D&O insurance marketplace is the question of how artificial intelligence (AI) will impact the D&O liability and insurance landscape. In order to get a sense of the industry’s current thinking on AI-related issues, The D&O Diary, in collaboration with Allianz Commercial, recently prepared and distributed a survey seeking readers’ views on several AI-related topics.

The survey drew 250 responses from industry professionals located in the United States, Germany, the United Kingdom, Canada, and 21 other countries. The strong response provides a detailed picture of how the insurance industry views this new and challenging technological frontier.

Continue Reading Industry Survey Results: AI’s Impact on D&O Liability and Insurance

In recent years, the D&O Diary has followed the growing debate over whether companies should reincorporate outside Delaware, particularly in states such as Nevada and Texas.  We have also followed Delaware’s efforts to address the trend through measures including the enactment of SB 21 and the Delaware Supreme Court’s decision upholding the statute.

And we queried whether DExit could prove to be a new source of D&O exposure. A newly amended class action complaint against Dropbox may provide yet another example of that risk, as shareholders are challenging Dropbox’s reincorporation to Nevada, alleging that the move was undertaken to protect management and the controlling stockholder from accountability for underlying business and governance decisions.

Continue Reading Dropbox Derivative Suit Over a DExit

As we have previously noted (most recently, here), geopolitical issues represent an increasingly important source of D&O risk. A lawsuit filed late last week against the fuel cell and power generation firm Bloom Energy highlights this developing source of risk. In the new complaint, a plaintiff shareholder alleges that the company understated its supply chain exposure to China and understated the extent of its reliance on China for a specific rare earth element, scandium. The company’s share price declined after a short seller’s media outlet published a report claiming that the company was, in fact, reliant on Chinese scandium. A copy of the new complaint against Bloom Energy can be found here.

Continue Reading Geopolitical Issues Lead to Securities Suit Against Fuel Cell Company