AIG Specialty Insurance is under fire after two ex-Navidea Biopharmaceuticals directors sued, claiming the insurer refused to cover their defense in a shareholder lawsuit.
Filed on August 25, 2025, in the Central District of California, the complaint from Agnieszka Winkler and Malcolm Witter lands squarely in the lap of the insurance industry, raising questions about how D&O policies are supposed to work when the chips are down. At the heart of the dispute: whether AIG Specialty Insurance Company (ASIC) should have advanced legal costs for two former board members caught up in a Delaware securities class action.
Let’s break down what’s at stake. Winkler and Witter, both California residents, served as directors at Navidea Biopharmaceuticals, Inc. Winkler was on the board for just two months, while Witter served less than three years. Both were named in a class action filed by shareholders in September 2024, with accusations ranging from facilitating the CEO’s removal to approving a string of complicated financial deals - think stock swaps, loan agreements, and changes to company bylaws. The lawsuit also points to Witter’s role in rejecting a multimillion-dollar tender offer.
When the lawsuits landed, Winkler and Witter turned to their company’s insurance. Navidea had two policies with ASIC: a $1 million management liability policy and a $4 million Side A D&O policy, both covering the period from June to November 2024. According to the complaint, these policies promised to pay for “losses,” including legal bills, if Navidea itself didn’t cover those costs. The directors say they did everything by the book - gave timely notice, sent invoices, and waited for ASIC to step up.
But ASIC said no. The insurer pointed to a “Specific Event Exclusion” in the policies, which blocks coverage for losses tied to certain events outlined in Navidea’s November 2023 financial filings. ASIC highlighted two situations: a Texas lawsuit over a loan (the so-called CRG Litigation) and a stock exchange compliance issue that led to Navidea’s delisting from the NYSE American. According to the complaint, ASIC argued these events triggered the exclusion and justified denying coverage.
Winkler and Witter aren’t buying it. Their complaint insists neither the CRG Litigation nor the stock exchange issue has anything to do with the claims against them in the Delaware lawsuit. They argue that ASIC is stretching the exclusion and ignoring the actual allegations. The directors also say the insurer didn’t do a thorough investigation and was more interested in protecting its own bottom line than honoring the policies.
The complaint spells out what the directors want: damages for breach of contract, extra damages for bad faith, and all the legal costs they’ve racked up trying to get ASIC to pay. They’re also asking for punitive damages to send a message.
For insurance professionals, this case is a wake-up call. It’s a reminder that D&O policies are only as good as the claims process behind them. When directors get sued, they expect their insurer to back them up - especially when the stakes are high and the policies spell out clear obligations. The outcome of this case could shape how insurers handle D&O claims, how exclusions are interpreted, and how future policies are written.
As of now, this is just the opening round. The court hasn’t made any findings, and ASIC hasn’t had its say. But for anyone in the insurance business, it’s a story worth watching - because next time, it could be your client, your policy, or your reputation on the line.
