For Further Information:       
The Patterson Law Firm, LLC
Sarah Frye
Phone: 312.223.1699
August 19, 2011

 

FOR IMMEDIATE RELEASE:

An Insurance Coverage Win for Corporate Directors

CHICAGO, IL  – The Appellate Court affirms that an important insurance coverage win for corporate directors is now final. One of the key inducements offered by companies to persons they want to serve as directors is directors and officers insurance (D&O coverage). Yet the insurance policies purchased for that purpose often contain exclusions that negate the coverage.
Two common exclusions are the insured versus insured and the bankruptcy exclusion. The bankruptcy exclusion, in particular, would negate coverage in the circumstance when the directors need it most: when the company has failed and the creditors or other shareholders are looking for someone to blame.

Recently, the Illinois Appellate Court affirmed a ruling of the trial court that neither exclusion could apply to deny coverage to directors facing lawsuits by a bankruptcy trustee. Yessenow v. Executive Risk Indemnity, Inc. was issued June 30, 2011. No motion to reconsider or appeal this decision was made and the decision is now final. The bankruptcy exclusion was deemed unenforceable by section 541(c) of the Bankruptcy Code.

“The decision is well-reasoned and significant to directors everywhere who need insurance coverage, but face these common exclusions with insurance companies who deny coverage,” Thomas Patterson of The Patterson Law Firm, LLC and the attorney for the directors said.“I believe that many directors and perhaps some lawyers read these policy exclusions but have not read the Bankruptcy Code and the cases and neglect to claim coverage that is rightfully theirs.”

The Patterson Law Firm, LLC is dedicated to helping businesses, professionals and entrepreneurs properly handle business lawsuits while facilitating effective business practices. The law firm practice areas include breach of contract, intellectual property and insurance coverage.

For the latest in emergency business litigation, check out http://emergencybusinesslitigation.com or .

Looking for a Chicago attorney or an Illinois attorney? Call The Patterson Law Firm, LLC at 312.223.1699.


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