Although analysts' estimates of directors and officers liability insurance losses related to the subprime crisis reach as high as $9 billion, insurers may look to standard D&O policy exclusions to lower ultimate payouts.
Based on a review of court rulings in D&O coverage matters, however, it is not entirely clear that insurers will be successful in relying on one particular exclusion–for dishonesty.
While the exclusion may cushion some of the losses for insurers, courts reviewing the applicability of exclusion have focused on the specific language of the clause–whether a dishonest insured engaged in intentional wrongdoing and whether there has been a finding that an insured actually engaged in the excluded conduct.
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