Internal Investigation Costs
Securing elusive insurance coverage
The potentially high cost of internal investigations has increased demand for insurance coverage. Traditional directors and officers (D&O) insurance policies afford some level of investigations coverage, however the parties must carefully assess whether the risk being covered is the same risk that they seek to have covered. While companies may believe they have purchased “investigations coverage,” these policies may contain limitations regarding the number, size, complexity, scope, onset and cost of modern investigations.
The implications for D&O insurance coverage related to investigations are significant and to ensure the maximum coverage possible for costs associated with investigations, several portions of a policy including definition of claims, co-defendant language, definition of loss, conduct exclusions and adjudication language, civil fines and penalties coverage must be addressed.
It is important to remember that D&O insurance policies are not off-the-shelf products. Instead, they differ widely from carrier to carrier and insured to insured and can - and should - be tailored to meet a given company’s needs.
The attached report explores how investigation costs may, at least in part, not be covered by traditional D&O policies, and options that may provide greater protection.