In a recent New Jersey Supreme Court decision, the court adopted an expansive interpretation of a D&O policy’s dual capacity exclusion—one that effectively eliminated coverage for all claims tied to an executive’s role with an uninsured entity.
Anthony Bartell speaks with Law360, noting that that while the court acknowledged traditional principles requiring narrow construction of exclusions, its application ultimately diverged from those standards. His observation highlights a key concern for policyholders: even where courts recite established interpretive rules, the practical outcome may still favor a broad reading that undercuts reasonable expectations of coverage.
The decision underscores the importance of closely evaluating D&O policy language—particularly where executives serve in multiple roles—and considering whether current coverage adequately accounts for overlapping capacities.