An Update on the “Capacity” Coverage Defense in D&O PoliciesBy design, Directors and Officers (D&O) liability insurance is constrained to cover directors and officers of the insured corporate entity in their “capacity” as directors and officers of the corporate entity. Given that reality, there are two primary ways in which a director or officer acts in an uninsured capacity: (1) where the director or officer acts in a non-official capacity and (2) where the direct or officer acts outside the scope of his or her official duties.As to the former, examples of non-official insured capacities might include directors or officers acting as shareholders, investors, or guarantors of the insured entity. Additional common examples are where the officers or directors are simply acting for themselves or as a director or officer of another company.As to the latter, examples of actions outside of the scope of official duties include committing personal or criminal misconduct, such as... Read the complete article here...© 2025 Wilson Elser
What Capacity Is Your Capacity In?
