In a ruling that will interest insurers and risk managers alike, the Delaware Supreme Court on July 23 weighed in on a dispute between renewable energy firm Origis USA LLC and a group of insurers over directors and officers liability coverage. The decision touches on how key provisions in D&O policies - particularly no-action clauses and prior acts exclusions - apply when claims emerge from corporate transactions.
Origis and its CEO, Guy Vanderhaegen, are defending a federal lawsuit brought by former investors who allege they were misled into redeeming their stakes before the company was sold for a significantly higher valuation. Origis turned to its insurers for help covering defense costs. Those insurers, which include Great American Insurance Company, AXIS, RSUI, Ascot, Endurance, Berkshire Hathaway, Ironshore, and others, pushed back - triggering the coverage litigation.
The coverage was split across two policy periods: one from 2021, with Great American as the primary carrier, and another from 2023, led by Bridgeway Insurance Company. Both towers consisted of layered D&O policies sold to Origis and its leadership.
In the 2023 tower, the court sided with insurers, agreeing that coverage was excluded because the alleged misconduct stemmed from actions before November 18, 2021. That date marked the cutoff under the policies’ prior acts exclusions. While Origis argued that some of the alleged wrongdoing - specifically, a failure to produce documents during the investor dispute - occurred later and should trigger new coverage, the justices didn’t buy it. The court said those newer allegations still “arose out of” the earlier events, making the entire claim ineligible under the 2023 policies.
But the 2021 tower presented a trickier issue. Those policies didn’t include a duty to defend. Instead, they required Origis to handle its own defense and submit requests for reimbursement. At the same time, the policy included a no-action clause barring lawsuits against insurers until the insured’s obligation to pay was “finally determined” by judgment or settlement.
Origis argued that this clause shouldn’t block its claim because the insurers had allegedly failed to advance defense costs as required under the policy’s advancement and allocation provisions. Great American had offered to cover only 10 percent of those costs. Origis said this offer wasn’t made in good faith and didn’t meet the standard required under the policy, which obligated the insurer to pay what it “believes to be covered” until a more formal allocation is reached.
The Delaware Superior Court dismissed the claim against the 2021 insurers, ruling that the no-action clause barred the lawsuit. But the Supreme Court sent that part of the case back for further review. The justices said the lower court didn’t fully explore how the advancement language in the policy interacts with the no-action provision - particularly in an indemnity-only structure where defense costs can add up quickly.
For insurers and brokers who structure D&O programs, the decision is a reminder of how policy language can collide in the claims process. It also reinforces the importance of clear coordination between advancement obligations and litigation timing, especially when no-action clauses are involved. While the court upheld much of the trial court’s ruling, the remand on the 2021 tower signals that how – and when – insurers handle defense payments can influence whether they’re pulled into court sooner than expected.
The ruling closes one chapter of a multi-party coverage fight involving eleven insurers and high-stakes claims. But it leaves open questions around how courts should interpret advancement provisions in real time, especially when the underlying litigation remains unresolved. For now, insurance professionals should take note of the court’s emphasis on contract clarity - and how quickly a no-action clause can become a central issue in D&O disputes.
