Navigating The Seas Of D&O Policy Rescission Severability provisions may provide a false sense of security for corporate buyers











eliminate

XX



Does any director have knowledge of an act which might give rise to a claim under the policy?







Rescission is not a quick fix.









The rescission standard.





National Union Fire Insurance Co. vs. Federal Deposit Insurance Corp.

and either

Home Insurance Company vs. Spectrum Information Technologies Inc.







Understanding D&O Severability Provisions













Severability does not eliminate the risk of rescission.





as a whole Home Insurance Co. vs. Dunn ab initio



What Can Insurers Do?





First, avoid waiver of the right to rescind.

Additionally, insurers must obtain an understanding of the applicable state law.

Most importantly, insurers must be aware of the potential for bad faith claims.

Reproduced from National Underwriter Edition, September 16, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.