Hangley Aronchick attorneys Bonnie Hoffman and Matthew Klebanoff recently wrote this article for Covered Events, in which they discuss the issue of whether an insured’s “Loss” constitutes insurable damages, settlements, or judgments versus uninsurable disgorgement, restitution, fines or penalties. The article also looks at significant developments in this area, including the Supreme Court’s recent ruling in Kokesh v. S.E.C., in which the Court unanimously held in the context of an SEC enforcement action that “disgorgement constitutes a penalty” – even if aspects of disgorgement are “compensatory” in nature. The article concludes by offering some practical guidance for insurers faced with “Loss” and disgorgement issues.

This article originally appeared in the February 5, 2018, issue of Covered Events, the Newsletter of DRI’s Insurance Law Committee.

Read the article