In an article for New York Law Journal titled, “Insured Capacity and Outside Capacity: Status Matters,” Schulte Roth & Zabel of counsel Howard B. Epstein and partner Theodore A. Keyes discuss insured capacity and outside capacity under directors and officers (D&O) or management liability insurance policies in the context of Associated Industries Insurance Company v. Wachtel Missry, et al.

D&O or management liability insurance policies typically provide coverage for claims arising out of wrongful acts committed by directors or officers (and often also employees) in their role as directors or officers of the insured entity — that is their insured capacity. The insurance contract typically makes this insured capacity limitation clear through either the definition of wrongful act or through an exclusion.