Warranty Letters And D&O Defense Obligations

Law360, New York (November 18, 2009, 10:09 AM EST) -- Policyholders seeking to obtain Directors & Officers and many other types of liability coverage are often confronted with the question of whether, apart from agreeing to the terms of the policy, they should also acquiesce to an insurer’s request that they sign a separate warranty letter at the time of policy placement.

If faced with such a request, a prospective insured should proceed with caution.

Rather than simply restating conditions in the policy, warranty letters are separate agreements that insurers often try to use to impose...
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