Does D&O Cover Shareholder Lawsuits?
D&O may respond to a shareholder lawsuit that alleges a covered management act.
Late reporting can affect the defense.
Shareholder status alone does not decide coverage. A suit may allege a securities wrongful act, governance failure, or a derivative demand, and the form may treat each differently. Side A and B protect individuals through personal or reimbursement grants; Side C may cover the entity, often for a defined securities claim. The Chubb specimen illustrates a securities-focused entity grant, but other forms vary. Check the plaintiff and claim definitions, derivative-demand investigation expenses, insured-versus-insured exceptions, prior litigation wording, and allocation if only some allegations qualify. Report the claim within the policy’s notice requirements.
