Skadden Discusses Delaware Law Authorizing Captive Insurance for D&O Coverage

On February 7, 2022, Delaware’s governor signed a bill amending the Delaware General Corporation Law (DGCL) to expressly authorize Delaware corporations to purchase and maintain directors’ and officers’ (D&O) liability insurance by or through captive insurance companies. This amendment, described further below, permits coverage for liabilities incurred by a corporation’s directors, officers, employees and agents, even in certain situations where the corporation would not be permitted to indemnify for such liability.

Background

When directors and officers face claims in their capacity or status as such, their defense costs generally will be indemnified or advanced by the corporation. However, there are … Read more