March 10, 2009
The Insurance Coverage Counseling & Litigation Group is sending this alert to clients and interested parties because of the potential for insurance coverage issues arising out of investor losses in connection with the recent collapse of alleged Ponzi schemes run by Bernard L. Madoff, Stanford Financial and others whose schemes recently have come to light. Businesses that had direct or indirect dealings with investment scammers should evaluate what protection is afforded by their liability insurance program since.
Most McGuireWoods clients have an arsenal of insurance protection that potentially provides them with a fertile source of recovery for losses arising out of these alleged Ponzi-related losses. Clients should focus on their Directors’ and Officers’, Errors and Omissions and Fiduciary Liability insurance policies. Businesses that were involved with any Ponzi scheme should consult with insurance coverage counsel now to avoid problems in pursuing insurance claims.
Following are some examples of the types of claims arising out of these two situations that may be covered by insurance:
As with any insurance claim it is critically important to evaluate and submit insurance claims promptly. Our clients should be aware of the following recommendations in order to maximize the potential for their insurance recovery:
The firm’s Insurance Coverage Counseling & Litigation Group works closely with our clients’ in-house counsel and risk managers to handle D&O, E&O (including professional liability) and Fiduciary insurance claims. Our practice group has helped many businesses and financial institutions collect from their insurers for losses arising from these types of claims.