But those are pretty much "old hat" now, he suggested, referring to the fact that securities lawsuits and adviser suits have been the hot topic at numerous conferences and publications.

Less frequently discussed Madoff-related suits are those that "have started to show up in the ERISA world," he said, identifying a trend that could spell trouble for fiduciary liability insurers.

Fiduciary liability insurance, often written by the same insurers that participate in the D&O market, covers employee benefit plan fiduciaries (people who exercise control over the management or administration of pension, health and other employer plans) for breaches of their fiduciary duties and errors they make. Fiduciary duties are prescribed by the Employee Retirement Security Act.

Madoff-related suits alleging ERISA breaches open up "another pocket" for the recovery of investment losses, Mr. Rubinstein said. "The D&O route often doesn't provide enough money, [and] there are some situations where it doesn't apply," the defense lawyer said, noting that similar problems exist for suits against lawyers, accountants and investment advisors.

"There appears to be no end to the losses, and there's no way available assets are going to cover all the losses. So plaintiffs' lawyers are going to be looking for pockets to help people get whole," he said, highlighting a case filed in February of this year called Pension Fund For Hospital & Health Care Employees v. Austin Capital Management.

That case, which was filed in the Eastern District Court of Pennsylvania in Allentown, Pa., is widely being considered as the first Madoff-related ERISA claim, Mr. Rubinstein said.

Giving some background of the case, he said that Austin Capital Management managed all the pension funds for the plaintiff, and Austin Capital, in turn, put a significant amount of the pension funds' money with a feeder fund that invested with Mr. Madoff.

Claims under ERISA spelled out in the lawsuit were failure to supervise, failure to do due diligence, failure to notice red flags and failure to continue to monitor the investments, he explained.

"If you…look at the complaint, it effectively states a cause of action that would survive a motion to dismiss," he said.

That's what's notable about the case, he said. "It signals a beginning," he asserted, going on to describe other characteristics of ERISA suits that could make them preferable avenues to securities claims.

ERISA claims and securities cases are often based on similar theories of liability, he said. As in securities cases, allegations can center on lack of disclosure and misleading statements, but ERISA claims, he said, are not subject to high pleading requirements of the Private Securities Litigation Reform Act on 1995.

Under PLSRA, which governs securities suit filings, plaintiffs have to plead "specific evidence [and] actual knowledge of facts that give rise to a strong likelihood" of liability.

He also pointed out there's a stay of discovery associated with securities cases that's absent in ERISA cases. Under PSLRA, once a motion to dismiss is filed by defendants, "everything stops," he said.

That discovery stay of the PSLRA puts a lid on document review costs–"an extraordinarily high cost item" for defendants and insurers that can involve going through "hundreds of thousands, if not millions" of documents and e-mails, he explained

"If they bring the same case under ERISA, you don't have the protection," Mr. Rubinstein said.

"Plaintiffs are realizing that not only is this an additional pocket, but it an additional pocket where they can get a little more leverage having to deal with less strict requirements," he concluded.