Hunton Insurance Recovery Blog

Companies have long favored Delaware for business purposes for a multitude of reasons. One new reason to add to that list may be Delaware’s approach to coverage under directors and officers, errors and omissions, and other claims-made liability policies for costs incurred in responding to government investigations. Building upon prior pro-policyholder rulings, a Delaware court recently concluded that a DOJ civil investigative demand (CID) was a covered “Claim,” even where the policy expressly included other, more limited coverage targeting governmental investigation expenses.

The Delaware Superior Court recently held, in Conduent State Healthcare, LLC v. AIG Specialty Insurance Company, et al., that a government-conducted civil investigation constitutes a “Claim” sufficient to trigger coverage under a professional liability insurance policy. Conduent State Healthcare, LLC (“Conduent”) alleged that Defendant AIG Specialty Insurance Company (“AIG”) breached its obligations by refusing to defend and indemnify Conduent for costs incurred in connection with a Medicaid fraud investigation.