Key facts
- Insurers must fund defense costs for two former Petrofac executives facing bribery charges.
- The court ruled that insurers cannot withdraw funding until fraud is established by a court, tribunal, or regulator, or admitted in writing.
- The policy in question is a second excess layer providing £45 million of cover.
- The executives argued they could not fund their own defense and that withdrawing cover would jeopardize their ability to defend themselves.
Nine Lloyd's market insurers must continue paying defense costs for two former Petrofac officers facing bribery charges, after a Commercial Court judge ruled their attempt to pull coverage came too soon. The decision, handed down on September 11, 2026, turned on a clause in the directors' and officers' insurance policy that barred the insurers from walking away unless fraud had first been established by a court, tribunal, or regulator, or formally admitted. Since neither condition had been met, the avoidance was ineffective.
Marwan Chedid and George Salibi, former officers of the oilfield services group Petrofac, have pleaded not guilty to criminal charges under sections 1(1) and 1(2) of the Bribery Act 2010. Their trial is due to begin at Southwark Crown Court on November 2, 2026, and is expected to run until at least February 12, 2027.
The policy in dispute was the second excess layer in Petrofac's D&O program, providing £45 million of cover in excess of £30 million. The insurers' solicitors sent letters avoiding the policy on August 10, 2026, on the grounds of alleged fraudulent misrepresentation and non-disclosure in the placement of the cover. The defendants argued they could not fund their own defense and that withdrawing cover less than three months before their trial would jeopardize their ability to defend themselves.