Delaware steers D&O outcomes

Delaware judges are deciding more directors and officers insurance fights, and the forum is shaping who gets paid and who does not. (insurancejournal.com) The shift runs through two courts: the Court of Chancery, Delaware’s main business court, and the Superior Court’s Complex Commercial Litigation Division, or CCLD, which opened in May 2010 for business cases worth at least $1 million. Delaware says Chancery handles the internal affairs of its corporations, while the CCLD was built for large commercial disputes. (courts.delaware.gov 1) (courts.delaware.gov 2) Directors and officers insurance is the policy companies buy to cover board members and executives when investors, regulators, or other plaintiffs sue them over management decisions. Insurance Journal reported on April 13, 2026 that Delaware’s courts now influence defense costs, settlement leverage, and overall insurer exposure in those cases. (insurancejournal.com) That influence starts with choice of law, which is the rule that decides which state’s law interprets the policy. In 2021, the Delaware Supreme Court said Delaware law governs directors and officers policies issued to Delaware corporations in RSUI Indemnity Co. v. Murdock, even when the company was based and insured in California. (hunton.com) (americanbar.org) The court reinforced that approach on January 12, 2023, in Stillwater Mining Company v. National Union Fire Insurance Company, where it again kept Delaware law in place in a directors and officers coverage dispute. Morris James said the court relied on Delaware’s interest in applying one set of rules to insurance for Delaware corporations across jurisdictions. (morrisjames.com) Recent rulings have also narrowed some insurer defenses. On January 27, 2026, the Delaware Supreme Court held in Illinois National Insurance Co. v. Harman International Industries that insurers had to cover a $28 million settlement tied to Harman’s sale to Samsung because the carriers did not prove the settlement effectively increased the merger price under the policy’s bump-up exclusion. (wtwco.com) (riskandinsurance.com) Another recurring fight is over “related claims,” which decides whether two matters are really one claim tied to an older policy year. On February 4, 2025, the Delaware Supreme Court adopted a “meaningful linkage” test in Alexion Pharmaceuticals, a standard that turned on how closely an earlier Securities and Exchange Commission subpoena matched a later securities class action. (natlawreview.com) Delaware’s corporate focus reaches beyond policy wording and into board process. Insurance Journal said judges who regularly review minutes, deal structures, indemnification rights, and oversight records can connect weak documentation to both the underlying fiduciary case and the later insurance fight over notice, exclusions, and settlement character. (insurancejournal.com) That is one reason Delaware remains central even as some companies debate leaving the state. Hunton Andrews Kurth said Delaware still sets the terms for many coverage disputes because so many public companies are incorporated there, and the American Bar Association said the state’s recent decisions have extended coverage in areas including government investigations, noncash settlements, and False Claims Act exposure. (hunton.com) (americanbar.org) For insurers, the practical response is not just tighter wording. In Delaware, the paper trail from the boardroom can end up mattering almost as much as the policy itself. (insurancejournal.com)