Jenner & Block

Client Alert: Federal Court Interprets D&O Policy to Permit Coverage for False Claims Act and Qui Tam Actions

The availability of insurance in connection with False Claims Act (FCA) and qui tam investigations and suits is a critical consideration for government contractors in nearly every industry, including the defense, construction, information technology, energy and health-care sectors.  The cost to defend the company (and in some instances, its directors and officers) against FCA-related actions can be staggering.  During the four-year period from January 2009 through the end of 2012, the Department of Justice’s recoveries under the FCA exceeded $9.5 billion.  In this Client Alert, Partner, Matthew L. Jacobs and Associate, Jan A. Larson, report on a recent federal district court decision that confirms the availability of coverage for actions alleging violations of the FCA and represents a significant victory for policyholders.