No company, director or officer likes when the government comes knocking with a subpoena, Wells Notice or similar regulatory investigation communication. Such demands can have significant legal ramifications and can be expensive to address. Frequently, when receiving a governmental inquiry, companies, directors and officers are busy marshaling resources to comply and may overlook an important issue: the availability of insurance coverage under “directors and officers” (D&O) liability policies.
D&O insurance can be a valuable resource to help recoup costs associated with responding to governmental subpoenas and investigations. However, timely notice is crucial to reap the benefits of coverage. If a company, director or officer waits too long to notify their insurer, it may jeopardize coverage.
