A recent court decision highlights the importance of understanding the potential applicability of the directors and officers (D&O) and fiduciary liability policies to claims arising out of “settlor” liability.

This article will discuss the distinction of a director or officer acting in a management (e.g., corporate) capacity, as opposed to acting in his/her capacity as an Employee Retirement Income Security Act (ERISA) fiduciary. This is an important difference as the issue of capacity may determine what policy will respond to which allegations. In addition, we will briefly discuss steps clients can take to ensure coverage is appropriately provided and claims are properly reported.