Directors’ and officers’ insurance: third party rights

There was in the January 2012 issue of Insurance Law Monthly a report on the decision of Lang J in the High Court of New Zealand, Auckland District Registry, 15 September 2011, in Steigrad v BSFL 2007 Ltd.

It was commented that the decision struck a blow at the efficacy of D&O cover in New Zealand and also in New South Wales, in that it in some cases rendered defence costs irrecoverable from the insurers where the director had become insolvent. The decision has, doubtless to the relief of policyholders, brokers and indeed underwriters, been reversed by the Court of Appeal, [2012] NZCA 604.