The right to rescind coverage under an insurance policy has always been a powerful tool for insurers to combat alleged insurance fraud. By rescinding coverage, an insurer not only avoids payment for a particular claim, but also voids the entire policy, ab initio, as if it never existed. Actions for rescission of directors and officers (D&O) insurance policies, though, are fewer and far between in recent years because the terms of such policies have been highly negotiated and revised to include certain features that make it much harder for insurers to rescind coverage.
This article will explore current policy terms that impact an insurer’s ability to rescind coverage, recent case law addressing rescissions under D&O policies, issues to consider when seeking new or renewal D&O coverage, and other legal issues that may impact coverage.
Download the PDF below to learn more.