SPAIN Trends and Developments Contributed by: Gonzalo Ardila, Margarita Morales, Fátima Mallén and Alberto Witzl, Hogan Lovells Cadwalader
corporate directors, the D&O policy offers dual protec- tion. On the one hand, it covers the civil liability of the director in the performance of his duties and, on the other, it guarantees legal defence costs against the claims brought against him. The Civil Chamber of the Supreme Court has recent- ly issued two judgments of extraordinary relevance – Judgments No 433/2026, of March 19th, and No 479/2026, of March 25th – that address core issues relating to the subjective delimitation of the insured risk and the standing to claim coverage. Both deci- sions provide far-reaching interpretative criteria for the configuration of these insurance products in the Span- ish market. The following discussion will address the main legal issues arising from both rulings. Nature of D&O insurance and the problem of imported policies D&O insurance is configured as liability insurance (Article 73, Insurance Contract Act (ICA)) taken out by the company (policyholder) for the account and benefit of its directors (insureds). It is a contract for the account of another (Article 7, ICA), whose cov- ered risk includes both the indemnity to the injured third party and the legal defence costs of the insured (Article 74, ICA). One of the most relevant contributions of Supreme Court Judgment No 433/2026, of March 19th, is the explicit denunciation of the “uncritical reception” of D&O policies drafted by US insurers which, when marketed in Spain through mere translations, do not take into account the particularities of Spain’s legal system. The “Business Guard D&O” policy signed with AIG defined “director” exclusively as a natural per- son, following the tradition of legislations such as that of Delaware. However, Article 212 bis of the Capital Companies Act expressly allows a legal entity to be a director. In the case under review, Comercial Aliper 1996, S.L. (“Aliper”), a legal entity director of a company in insol- vency proceedings, claimed from the insurer coverage of its legal defence costs in the misconduct classifica- tion section. The Supreme Court dismissed the claim, as the policy only covered natural persons, and Aliper did not hold the status as an insured. The judgment
also emphasises that in liability insurance the posi- tions of insured and injured third party are structurally incompatible, which prevents the policyholder from claiming simultaneously under both conditions. The standing of the shareholder as an injured third party Supreme Court Judgment No 479/2026, of March 25th, addresses a matter of extraordinary significance, namely the standing of the shareholder of a company to claim, as an injured third party, coverage under the D&O insurance taken out by the company whose director has caused them direct damage. The case pitted Comsa, S.A.U. (“Comsa”) – a 100% subsidiary of Comsa Emte, policyholder of the policy with QBE Insurance – against the insurer. The general manager of a Chilean subsidiary of the group had poorly man- aged certain projects, reporting overstated profits by more than EUR23 million, causing Comsa direct dam- age materialised in the enforcement of guarantees for more than EUR30 million. The Court establishes a decisive criterion: when the policy does not contain a definition of “injured third party” nor an exclusion clause in this regard, the standing of the shareholder to exercise the direct action of Article 76 of the Insurance Contract Act can- not be denied. (Article 76 provides: “The injured party or their heirs shall have a direct action against the insurer to require fulfilment of the obligation to pay the indemnity.”) The insurer itself acknowledged that “the policy in question does not contemplate, as it should, the defi- nition of injured third party”. However, it is required as an essential requirement that the shareholder has suffered a direct damage to his assets, not merely indirect or reflective. The judgment identifies two ways to contractually delimit the injured third party. On the one hand, its direct definition with exclusions, and, on the other, the indirect definition through the concept of “claim”, excluding those filed by certain persons. The absence of both mechanisms broadens the coverage beyond what was contemplated when rating the risk. Never- theless, both judgments agree that defence costs cor- respond only to whoever holds the status of insured,
222 I NSURANCE L I T IGATI O N 2026
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