Law360, New York (April 16, 2009, 12:00 AM ET) -- In the wake of the current financial crisis, large multiline insurance companies find themselves defending the Directors and Officers (“D&O”) and Errors and Omissions (“E&O”) policies issued to financial companies and the individual directors and officers.

Investors are also bringing securities class actions and other suits against certain insurance companies, particularly the monoline companies, claiming misrepresentation of purported risk exposure and inadequate internal underwriting and ratings systems for various classes of asset-backed securities.

However, there is a third situation — large multiline insurers with large investment...