The original headline is 11 words: "Delaware Court Applies Larger Settlement Rule to D&O Allocation Dispute"

Short summary

The Delaware Superior Court ruled in Hemisphere Media Group v. Fair American Select Insurance Co. that when a D&O policy lacks an express allocation methodology, the policyholder-friendly 'larger settlement rule' applies by default. The court distinguished between policies that identify allocation factors versus those that mandate a specific method, reinforcing the importance of precise allocation wording at policy placement.

• •Delaware court applies larger settlement rule as default when D&O policy lacks express allocation methodology
• •Relative-exposure language governs negotiations only, not binding allocation framework
• •Drafting differences in allocation provisions can significantly impact recoverable settlement proceeds

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