Hunton Insurance Recovery Blog

The New Jersey Supreme Court ruled in Mist Pharmaceuticals, LLC v. Berkley Insurance Company that a D&O insurer did not forfeit its right to rely on a capacity exclusion after partially funding years of litigation, repeatedly representing that partial coverage was available, and waiting five years to fully disclaim. While the Court ultimately enforced the exclusion, the decision offers several important takeaways for policyholders, particularly with respect to reservation of rights letters, settlement strategy, and D&O policy drafting.