D&O Rescission Actions Difficult, But Not Impossible

By Christie Smythe

Law360, New York (December 08, 2009, 4:58 PM ET) -- Rescission of directors and officers coverage is generally an uphill battle for insurers, but with billions of dollars in fraud-related claims mounting against many D&O policyholders, odds are some insurers might try that route to avoid being stuck with the bill, according to experts.

More common in the aftermath of Enron, Tyco and other late 1990s and early 2000s corporate scandals, rescission — the voiding of an entire policy for misrepresentation reasons — is now considered a “nuclear defense,” said Matthew L. Jacobs, a partner at...
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