Background of the Dispute
The insurance fight stems from a series of events that began with a shareholder securities lawsuit filed in 2017. Later that year, the U.S. Securities and Exchange Commission opened an inquiry into the company’s accounting practices. The U.S. Department of Justice followed with its own investigation in 2019.
Insurers funded the securities case under the earlier policy year but declined to cover the federal investigations and related derivative demands under the subsequent policy period. That disagreement triggered litigation between the company and its carriers.
A federal trial judge previously ruled in Under Armour’s favor, finding the lawsuits and investigations were separate claims that could tap both policy years. Excess insurers appealed, leading to the recent appellate decision now under challenge.
What’s at Stake
The outcome could determine whether Under Armour can double its available insurance recovery from $100 million to $200 million. The case also carries broader implications for companies and insurers negotiating endorsements that define when claims are deemed filed.
For corporate policyholders, the dispute highlights how technical wording in D&O policies can significantly affect access to coverage during high-profile investigations and securities litigation.
The Fourth Circuit has not yet indicated whether it will rehear the case.
