Companies have long favored Delaware for business purposes for a multitude of reasons. One new reason to add to that list may be Delaware’s approach to coverage under directors and officers, errors and omissions, and other claims-made liability policies for costs incurred in responding to government investigations. Building upon prior pro-policyholder rulings, a Delaware court recently concluded that a DOJ civil investigative demand (CID) was a covered “Claim,” even where the policy expressly included other, more limited coverage targeting governmental investigation expenses.
What Happened?
In The Cigna Group v. XL Specialty Insurance Co. et al., C.A. No. N23C-03-009 SKR CCLD (Del. Super. Ct. Dec. 8, 2025), a healthcare company sought coverage under a managed care E&O policy for costs incurred in responding to a DOJ CID issued in connection with an investigation into False Claims Act violations. Cigna asserted the CID was a covered “Claim,” which was defined as “any written notice received by [the company] that a person or entity intends to hold [the company] responsible for a Wrongful Act.” It said the CID was a Claim because it was a written notice received by the company, which intended to hold it responsible, and was for Wrongful Acts allegedly committed by the company as outlined in the CID.
The insurers disagreed, arguing that the CID was a “Governmental Investigation,” which was defined to include a “civil investigative demand,” and not a “Claim,” because the...
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