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Nationwide unit wins D&O coverage fight in conflicted-director dispute - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Nationwide unit wins D&O coverage fight in conflicted-director dispute by Richard Sine Claims Disputes , D&O , Excess and Surplus Lines Aug 20, 2026 A unit of Nationwide Mutual has beaten back a lawsuit by a former director of a bioscience startup who claimed the insurer wrongfully denied coverage for his claim that another former director breached his fiduciary duty. On Tuesday, in Terry Gross v. Scottsdale Insurance Company et al. , a federal court found the denial was required by the policy’s terms. Judge Edward J. Davila of U.S. District Court for the Northern District of California granted summary judgment to Scottsdale Insurance, an excess and surplus lines unit of Nationwide, on all of Mr. Gross’ claims. The dispute dates back to December 2018, when Mr. Gross, then a shareholder of Flora Bioscience, a San Francisco-based biotechnology company, demanded that Flora’s board sue a director for mismanagement and breach of fiduciary duty. Flora notified Scottsdale, which had issued the company a directors and officers liability policy. Scottsdale’s investigator concluded the claim had merit. In March 2019, two Flora directors resigned and sold their shares, and Mr. Gross agreed to buy the shares and take a board seat himself. He served as Flora’s sole director for three weeks before resigning when the company couldn’t find new D&O coverage. Scottsdale denied the claim months later, arguing that once Mr. Gross became a director, he qualified as an “insured” under the policy, triggering an exclusion that bars coverage for claims brought by one insured against another. Mr. Gross argued that a carve-out for derivative shareholder suits should still apply, since he filed his claim as a shareholder before becoming a director and did not actively assist it during his brief tenure on the board. Judge Davila rejected that argument, noting the policy defines an insured person as anyone who “was, now is, or shall become” a director. “Once Gross became a Flora director, he was an Insured, (so) any claim he had or would file could no longer proceed ‘totally independent of . . . any Insured,’” the judge wrote, quoting the policy. He added that the policy said that the exclusion applied whether or not collusion had occurred between directors. The judge also rejected Mr. Gross’s argument that he relied on a Scottsdale senior claims specialist’s assurance that his claim would remain covered even after he joined the board, noting that oral statements cannot override a policy’s written terms. Mr. Gross submitted an email from the claims specialist as evidence that Scottsdale had “no objection” to his becoming director. 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