Hanover Unit Seeks to Avoid D&O Coverage for Loan Guarantors

Individuals backing loans issued to a Missouri wholesale plant nursery aren’t covered under the company’s directors and officers policy, a Hanover Insurance Group Inc. unit told a federal court.

Only individuals acting solely in their capacity on behalf of Bela Flor Nurseries Inc. qualified for coverage under the policy, Hanover Insurance Co. said in a complaint filed in the US District Court for the Western District of Missouri on Tuesday.

The guarantors sought coverage after Bela Flor defaulted on various loans and filed for bankruptcy, leading creditors to seek payment from the individuals who issued and executed personal guaranties for ...