Picking Up The Bill

For those who missed it over the Christmas holiday, the Wall Street Journal had a feature article (subscrip. req’d) last Friday on the battle over whether the settlements entered into by several banks as part of the Enron and WorldCom securities litigations are covered by the banks’ errors and omissions insurance policies.

Quote of note: “But Swiss Reinsurance Co. and some other big insurance companies are balking. While many insurers have paid out at least a portion of such claims, the holdouts say banks shouldn’t be allowed to benefit through insurance from the roles they allegedly played in the frauds, or to cover their fines and legal bills. Beyond the money, the dispute raises questions about how heavily companies can rely on broadly written insurance policies to cover unanticipated losses stemming from alleged wrongdoing.”