Covers D&O’s for actual or alleged error, omission, misleading statement, neglect, breach of duty or act while in the course and scope of their duties.
In general, the policies exclusions can be divided into four categories: Uninsurable such as insider trading; Other insurance such as dishonesty or E & O; Beyond industry’s capacity such as nuclear, and; Underwriting judgment which includes items such as one insured suing another and litigation started prior to the policy inception.
Shareholders, competitors, vendors, clients, creditors, governmental agencies, owners of acquired businesses.
Directors and officers including their estates, heir, legal representatives, spouses, ex-spouses, as well as the corporation itself.
Average payment on closed claims was over $175,000 per claim, according to the 2012 D&O Liability Survey prepared by Tillinghast-Towers Perrin.
Up to the coverage amount purchased including defense costs for the entire policy period regardless of the number of claims.
For example, a $1 million policy with a $5,000 retention will pay up to $1 million excess of the first $5,000 of loss. You will pay the first $5,000 of any claim.
Most D&O policies have at least a $25,000 retention. ECC negotiates lower retentions and sometimes $0 retention if EPL is also purchased.
Yes, if the policy is written on a duty to defend basis. If not, you must make arrangements to find an attorney and manage the litigation yourself. Most D&O policies can be offered with a duty to defend.
You are free to use them if you choose as long as you get the consent of the insurance company first. They will want to make sure the attorney is qualified to handle such matters.
No, only the guilty party. There is severability of all exclusions which means only the guilty party is excluded.
No. D&O coverage will cover you up until the point you are found to be guilty in a court.
Yes as long as it is a Private offering and does not exceed $50 million. If you plan a Public Offering, please advise us as soon as possible so we can make arrangements to cover it.
It is automatically covered unlike most other policies which have an asset size test.
If the insurance company wants to settle a claim that you feel would be an admission of guilt and prefer continuing to fight instead, the underwriter can exercise its ‘hammer’ requiring you to pay any amounts in excess of the proposed settlement.
Imagine a policy expiring on 1/1 and receiving a claim on 12/31. Many policies require that you report it before that policy expires. In other words, New Year’s Eve. We always recommend claims be reported as soon as possible. Even if there is not an actual claim, it can be beneficial to report the occurrence to the underwriter.