PE Leaders' Many Hats Complicate D&O Policies

Law360 (July 9, 2019, 4:15 PM EDT) -- In the private equity and venture capital space, portfolio companies operate with varying degrees of independence from their sponsors, but it is not uncommon for the sponsor to share directors and officers with its portfolio companies.

Separate and apart from the inherent risk of litigation facing portfolio company directors and officers, there is also the risk of insurance coverage disputes arising when the sponsor-appointed directors and officers are targeted in litigation. A portfolio company’s management liability policy will generally limit coverage for the company’s directors and officers to actions taken in their capacity as such.

Meanwhile, for wrongful acts allegedly committed...

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