AIG Beats Verizon in Securities Claims Insurance Coverage Fight

An American International Group Inc. unit notched a win against Verizon Communications Inc. after Delaware’s high court freed the insurer from covering the telecommunications giant’s $95 million settlement with a spinoff’s bankruptcy trustee.

The underlying settlement didn’t involve any shareholder derivative claims as required for coverage in the directors and officers insurance policy, the Delaware Supreme Court said Friday, reversing a lower court decision.

The insurance dispute hinges on whether a bankruptcy trustee’s lawsuit against Verizon met the definition of a derivative securities claim under National Union Fire Insurance Co.’s D&O policy. A ruling against the insurer could have opened ...