In March 2023, we wrote about the failure of Silicon Valley Bank (“SVB”) and potential implications of its takeover by the Federal Deposit Insurance Company (“FDIC”). As we noted then, the FDIC, as receiver for SVB, has broad discretion to manage the bank’s assets and liabilities, including selling assets for the benefit of creditors and bailing out the distressed bank. 

Continue Reading Parent Company Beware: Subsidiaries’ Fidelity Bond Claims May Belong to FDIC in Receivership

Most policyholders purchasing directors and officers (D&O) liability insurance never contemplate the possibility that their insurer will one day demand repayment of advanced defense costs, let alone seek interest on top of repayment.  Although many D&O policies preserve an insurer’s contractual right to seek reimbursement of defense costs that are ultimately determined not to be covered, insurers rarely exercise that right.  Even rarer is a case in which an insurer not only litigates to recoup the advanced defense costs, but then seeks prejudgment interest on top of the amounts repaid.  A recent decision by the U.S. District Court for the District of Maryland in Navigators Insurance Co. v. Under Armour, Inc., No. CV RDB-22-2481 (D. Md. July 7, 2026), presents precisely this seldom-litigated scenario.  This case serves as a cautionary lesson to policyholders regarding reimbursement provisions and interim funding agreements, which can have significant consequences.

Continue Reading When Your D&O Insurer Wants Its Money Back — With Interest

Policyholders increasingly turn to artificial intelligence (“AI”) platforms to answer insurance coverage questions.  This is risky because: (1) AI models hallucinate legal content at alarming rates; and (2) AI cannot apply nuanced, fact-specific and jurisdiction-specific legal analysis.  As OpenAI Foundation recently acknowledged, “ChatGPT . . . neither has nor uses any degree of legal knowledge or skill.”  See 
https://fingfx.thomsonreuters.com/gfx/legaldocs/xmvjydomqpr/Nippon%20Life%20v%20OpenAI%20motion%20to%20dismiss.pdf.  Any policyholder who receives a “no coverage” answer from AI should consult experienced coverage counsel before accepting that conclusion.

Continue Reading Insurance Claims Deserve Better Than an Algorithm’s Opinion

PART 3: Tips for Negotiating Key Policy Terms

Introduction

Representations and warranties insurance policies are often viewed as relatively standardized products.  While many policies share common structures and core provisions, important differences frequently exist beneath the surface.  As a result, seemingly minor wording changes negotiated during underwriting can have significant implications when a claim arises.

Continue Reading RWI in Practice: A 7-Part Series for Deal Professionals

When private equity fund managers think about insurance, they usually think of Representations & Warranties Insurance (“RWI”).  That makes sense—RWI covers representations baked into the deal itself that are front of mind when buying and selling portfolio companies (“PortCos”).  But once a deal closes and a PortCo continues operations under new PE ownership, a whole new set of operational issues unrelated to pre-closing representations can surface, giving rise to potential claims under a host of different lines of insurance, including directors and officers (“D&O”), errors and omissions (“E&O”), cyber, crime/fiduciary, general/limited partner (“GP/LP”), commercial general liability (“CGL”), and property policies, among others.  To make matters worse, coverage gaps between policies issued at the fund level and the PortCo level, finger-pointing between insurers, lapsed policies, and inadequate coverage can result in substantial financial losses for the PE Fund and PortCo alike.

Continue Reading Non-Deal Exposure: Practical Tips for Enhancing Insurance Coverage For Private Equity Funds and Portfolio Companies

On June 29, 2026, Virginia’s $207 billion budget bill became law, bringing a retail cannabis framework that authorizes licensed sales beginning July 1, 2027.  Businesses entering this market should be prepared for unique insurance challenges, as no Virginia court has yet interpreted how standard commercial policies apply to such businesses.

Continue Reading Virginia Green-Lights Retail Cannabis: Coverage Implications for the Cannabis Industry

PART 2: Diligence and Coverage

Introduction

One of the foundational assumptions underlying representations and warranties insurance (“RWI”) is that the buyer has conducted a reasonable diligence process prior to closing.  Although RWI is designed to transfer certain post-closing risks to an insurer, it is not intended to replace diligence or insure against risks that were insufficiently investigated.

Continue Reading RWI in Practice: A 7-Part Series for Deal Professionals

PART 1: Representations & Warranties Insurance in Today’s Deal Market: Why It Matters More Than Ever

Introduction

Representations and warranties insurance (“RWI”) has rapidly evolved from a niche product used in select transactions to a near-standard feature in middle-market private equity deals. What was once viewed as an optional risk-transfer tool is now often a central component of deal structuring—influencing everything from bid competitiveness to post-closing risk allocation.

Continue Reading RWI in Practice: A 7-Part Series for Deal Professionals

Employers nationwide are experiencing a new wave of ERISA litigation targeting so-called “tobacco surcharges” on employees enrolled in employer-sponsored health plans. Because these lawsuits are generally brought as putative class actions, the stakes can be significant and some multi-million dollar settlements have already become public. But employers need not face the costs of defending and resolving these ERISA cases alone. Fiduciary liability insurance policies generally require insurers to pay for defense costs incurred in ERISA class actions and, depending on their terms and conditions, fiduciary liability policies may cover most, if not all, of any eventual settlements or judgments. Employers should carefully review reservation of rights letters and resist efforts by fiduciary liability insurers to improperly resist or limit coverage for tobacco surcharge litigation.

Continue Reading Maximizing Insurance Coverage for Emerging ‘Tobacco Surcharge’ ERISA Litigation

The insurance industry has been swift to adopt artificial intelligence (“AI”). According to consulting firm McKinsey & Company, 76% of insurers surveyed have already begun using generative AI in their day-to-day operations. [1] This adoption spans the different facets of insurers’ work cycles, including claims, underwriting, legal, and risk management. Policyholders and their attorneys must remain aware of the potential pitfalls of AI implementation, particularly as it pertains to claims management.

Continue Reading Insurance Industry’s Use of AI: A Fair or Unfair Claim Settlement Practice?