Less than five months after a high-profile case where CGU won a controversial High Court case over its refusal to advance costs to two directors’ and officers’ (D&O) claimants, the insurer has changed the wording of the policies. Facing up to concern about its reliability from brokers and customers as a result of the case, the insurer says it wants to deliver “greater certainty” to its customers.

The case involved former One.Tel MD Jodee Rich and CFO Mark Silbermann. The High Court refused them special leave to appeal a decision of the NSW Court of Appeal, which had supported CGU’s refusal to pay their costs in a case involving allegations of corporate fraud. The court also ordered Mr Silbermann and Mr Rich to pay CGU’s costs.

While both men had policies with the insurer, CGU said the policies were void on the grounds of fraudulent non-disclosure and misrepresentation.

CGU Professional Risks Manager Jun Acance says the changes – which involve advancement of defence costs, admission of dishonesty and fraud, and severability and non-imputation – came about after the insurer received feedback from brokers and policyholders.

“We believe these changes give directors and officers confidence that CGU will stand behind them in the event they need to make a claim,” he said.

The discretionary clause relating to advancement of defence costs – which was at the centre of the Rich-Silbermann case, has been removed. CGU says costs involve both civil and criminal proceedings, which isn’t always the case with D&O policies.

CGU has also limited the dishonesty and fraud exclusion to cases where there has been “an express admission, court judgement, or other final adjudication”.