Can D&O Insurers Contract Around Duty-To-Advance Costs?

Law360, New York (October 23, 2014, 10:19 AM EDT) -- Take a close look at your directors and officers policy and chances are it includes an allocation provision that states the insurer will only advance defense costs for covered claims, instead of advancing defense costs for all claims. Although D&O insurers promise to advance defense costs prior to the conclusion of the underlying action, many D&O and management liability policies now include such an allocation provision, which insurers have inserted in an effort to limit their broad duty to advance defense costs.

In the absence of an allocation provision, courts correctly have held that the duty to advance defense costs is...

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