A Delaware Court has issued a partial victory to insurers in one of the first directors and officers liability insurance coverage cases related to special purpose acquisition companies to reach a ruling, reports Business Insurance.
Social Capital Hedosophia Holdings III was a publicly traded SPAC that merged with privately held Clover Health Investments Co. in January 2021, according to the Feb. 6 ruling by the Delaware Superior Court in Wilmington in Clover Health Investments Corp. et al. v. Berkley Insurance Co. et. al.
Before the merger, Social Capital purchased D&O coverage from Sompo Holdings Inc. unit Endurance Risk Solutions Assurance Co., Lloyd’s underwriters and Fairfax Financial Holdings Ltd. unit Hudson Insurance Co., with Sompo unit Endurance issuing the primary tail policy.
The tail policies went into run-off with the merger, but an endorsement adjusted the policy period to end on Jan. 7, 2017.
The new company, Franklin, Tennessee-based Clover Health, obtained D&O coverage from units of W.R. Berkley Corp., Axa XL and Fairfax Financial unit Allied World Specialty Insurance Co., with Berkley issuing the primary “go-forward” policy.
The amount of the coverages provided was blacked out in the ruling.
Clover Health is seeking coverage for a securities class action, various shareholder derivative suits, a shareholder demand complaint filed under Delaware law, and a Securities and Exchange Commission investigation. Read more.
