A healthcare investment firm is taking on seven insurers, alleging they walked away from $35 million in D&O coverage when it mattered most.
Vivo Capital, LLC filed a suit last week in the US District Court for the Northern District of California, accusing Columbia Casualty Company and six excess carriers of failing to cover defense costs in a sprawling international dispute over its investments in Sinovac Biotech Ltd., the Chinese vaccine maker.
The January 7 filing paints a picture of an insured caught between two insurance programs, with neither willing to pick up the tab.
According to the suit, Vivo purchased equity stakes in the Antigua-incorporated biopharmaceutical company through a 2018 private investment in public equity transaction and a 2020 convertible bond deal. The investment firm's initial outlay was roughly $43.365 million. Those shares had ballooned to approximately $724.815 million by May 2025.
The trouble began after the Privy Council, the highest appellate court in Antigua and Barbuda, issued a ruling on January 16, 2025 that retroactively invalidated Sinovac's incumbent board of directors. What followed was a wave of litigation. Sinovac and its controlling shareholders, 1Globe Capital LLC and OrbiMed Advisors LLC, filed proceedings in Antigua seeking to void Vivo's transactions. A separate class action landed in Delaware Chancery Court, naming Vivo and one of its principals as defendants on claims of aiding and abetting shareholder oppression and unjust enrichment.
Vivo first turned to its 2025 D&O program, led by Mitsui Specialty Insurance USA, Inc. That insurer declined coverage, arguing the new claims were interrelated with a dismissed 2023 Delaware proceeding and therefore fell outside the current policy period.
So Vivo notified its 2023 insurers. Columbia Casualty, the primary carrier on that program, also said no.
The suit alleges Columbia Casualty offered two reasons for its denial: first, that the Antigua proceeding does not allege a "Wrongful Act" against Vivo or any other insureds; and second, that the 2025 proceedings are not interrelated with the 2023 Delaware matter, meaning only the 2025 program could respond.
In other words, each program is pointing to the other.
At the heart of the coverage dispute is the policies' interrelatedness language, which treats multiple claims arising from common facts or transactions as a single claim, dated to the earliest filing. The definition of what constitutes a covered "Wrongful Act" is also in play.
The 2023 program at issue includes $35 million in limits, with Columbia Casualty providing the first $5 million and excess layers from XL Specialty Insurance Company, Allianz Global Risks US Insurance Company, Argonaut Insurance Company, U.S. Specialty Insurance Company, Samsung Fire and Marine Insurance Co. Ltd. (US Branch), and Old Republic Insurance Company.
Vivo is seeking a declaration that the insurers must cover its defense costs, along with breach of contract damages against Columbia Casualty.
The case remains in its early stages, with no ruling yet on the merits.
