Delaware court applies larger settlement rule in D&O allocation disputes

Short summary

The Delaware Superior Court ruled in Hemisphere Media Group v. Fair American Select Insurance Co. that when a D&O policy lacks a mandated allocation method, the 'larger settlement rule' applies by default, favoring policyholders. The court found that the policy's 'relative exposures and benefits' language only guided negotiations, not post-dispute allocation. This decision reinforces Delaware's policyholder-friendly stance on D&O coverage disputes involving insured and uninsured co-defendants.

• •Delaware court applies 'larger settlement rule' when D&O policy lacks explicit allocation method
• •Ruling favors policyholders in coverage disputes with mixed insured/uninsured claims
• •Policy's 'best efforts' allocation language insufficient to displace default rule

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