The Yates Memo has many landscape-changing implications for corporate investigations, including the need for enhanced Upjohn warnings and the potential suppression of joint-defense agreements between corporations and their constituents (officers, directors, employees, shareholders). This new terrain exists because in order to receive cooperation credit from the government, companies must investigate and disclose all facts about corporate wrongdoers. With the spotlight shining on corporate actors from the outset, there will be an inevitable increase in individuals seeking to have independent counsel represent them early in the investigatory process. Defense costs will surely escalate under the new Yates directive. This has several important implications for D&O liability insurance coverage. A robust D&O insurance program is often critical to attracting top talent at the executive level. Concerns about personal liability can be an unnecessary distraction from the day-to-day tasks of running an organization. These concerns are likely to be amplified by the Yates Memo. As of September 2015, the US Department of Justice will only consider a company eligible for cooperation credit if it discloses all relevant facts about individuals involved in corporate misconduct. This is an “all or nothing” policy. If the company wants cooperation credit, it must tell the government everything it knows about culpable constituents. This policy emerged from the government’s perceived failure to prosecute high-level executives responsible for the financial crisis.

The Yates Memo’s greater focus on corporate individuals should cause companies to rethink their D&O liability insurance coverage on several levels...