About the Course
Introduction
This CLE webinar will address allocation issues under D&O policies, including the "relative exposure" and "larger settlement" rules, recent landmark decisions under Delaware law on allocation, and key considerations for policyholders as they navigate both insurance procurement and complex insurance claims and coverage disputes.
Description
D&O insurance policies almost always provide that the insurer and its policyholder will use their best efforts to determine a fair allocation of losses between covered and non-covered losses, taking into account their relative legal exposures. This generally applies to both costs of defense and indemnity. However, best efforts sometimes fail to result in an agreement, leading to litigation regarding the proper allocation of defense fees and settlement amounts. In these instances, different jurisdictions take different approaches to determining how amounts should be allocated between insurers and policyholders, with some courts not requiring allocation at all.
Recently, in an important and influential development, Delaware, a significant jurisdiction for D&O controversies, held that it would follow the "larger settlement rule." This policyholder-friendly rule provides that the total settlement is allocated to covered claims, and places the burden on insurers to demonstrate whether and by how much uncovered claims or parties might have increased settlement amounts, a complex and fact-intensive endeavor.
Listen as our experienced panel of insurance recovery practitioners discusses D&O policies generally, allocation issues under standardized D&O policy language, and the two general approaches to allocation espoused by courts. Against this backdrop, the panel will discuss recent Delaware decisions on allocation and the law in other key jurisdictions, and provide key issues and language for policyholders to consider, both when negotiating for D&O insurance and in connection with specific coverage claims and allocation disputes.
Presented By
Mr. Small counsels clients on the recovery of insurance proceeds and on risk management and insurance strategy. He represents clients in complex coverage disputes involving claims under various types of policies, including first-party property, cyber, D&O, E&O, general liability, product liability, and transactional liability.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, September 15, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. Overview of D&O Insurance and the standardization of policy language on allocation
II. Relative exposures rule
III. Larger settlement rule
IV. Recent cases under Delaware law: Hemisphere Media Grp. Inc. v. Fair Am. Select Ins. Co. (June 18, 2026)
V. How bargained-for policy language may impact courts’ decisions regarding allocation rules
VI. Key considerations in navigating allocation disputes
The panel will review these and other important issues:
- What type of policy language may lead a court to follow the larger settlement rule?
- Why does the Hemisphere Media case matter?
- What case-specific factors could be used by insurers to demonstrate that covered parties or claims increased the settlement amount, reducing coverage for policyholders?
