September 30, 2019

The U.S. District Court for the Central District of California held that the insurer is entitled to reimbursement for defense costs even though such reimbursement is prohibited by California Insurance Code section 533.5. The case is Adir International, LLC et al. v. Starr Indemnity and Liability Company, et al., No. 2:19-cv-0432-R-PLA, 2019 U.S. Dist. LEXIS 155321 (C.D. Cal. Sept. 10, 2019).

Adir International, LLC (Adir) initially procured an insurance policy for Directors' and Officers' liability coverage that ran from October 1, 2017 to October 1, 2018. The policy provided defense and indemnity coverage for non-employment "wrongful acts" alleged against individual directors and officers of Adir, and "wrongful acts" alleged against the company itself.