Hanover Group Holdings is in a High Court fight over an insurance policy worth up to $20 million.
This cover would be used for legal costs associated with the upcoming civil stoush between former Hanover directors and the Financial Markets Authority (FMA) or any damages that could be payable in that case.
The insurance wrangle centres on a directors and officers liability (D&O) policy Hanover took out in November 2007 with AIG and whether cover is provided for claims associated with certain Hanover prospectuses.
As it stands, AIG (now legally known as Chartis Insurance New Zealand) does not accept that two prospectuses released by Hanover Finance Limited and United Finance Limited are covered by the policy.
But Hanover's lawyer, Nathan Gedye, said this morning that a Hanover broker and AIG had agreed in 2007 there would be D&O cover for all prospectuses issued by the finance firm during the policy period.