DIRECTORS & OFFICERS
COVERAGE INCLUSIONS
Directors and Officers insurance are “Claims Made” policies, not occurrence policies. This means insurance will indemnify the inolved parties regardless of when the error occurred.
D&O policies cover publicly traded, private, and non-profit organizations.
SIDE A COVERAGE
in the event that a Director or Officer is personally sued, and the corporation is not obligated or unable to indemnify the Director or Officer for all expenses involved in defending the suit, Side A coverage will indemnify the Director of Officer only.
what expenses does it cover?
damages to third parties
claims expenses – defense costs, accounting costs, investigation costs
judgements
settlements
SIDE B COVERAGE
in the event that a Director or Officer is personally sued, and the Corporation is obligated to indemnify the Director or Officer for all expenses involved in defending the suit, Side B coverage will indemnify the Business Entity.
study by Chubb Insurance
17% of executives of companies with revenues of less than $25million believe they will experience a D&O claim within the next year
the average D&O event costs $697,902
38% of D&O claims are employee related
SIDE C COVERAGE
In the event both the Directors and Officers AND the entity are sued, Side C coverage will cover all costs, fees, settlements, and fines for the defense. These suits usually are brought upon by shareholders. Some Side C policies will cover the entity in a securities claim even if members of the board are not named in the suit.
who is covered?
anyone on the Board of Directors
Directors of subsidiary companies
outside Directors
estates, heirs, and spouses
named employees
WHO’S SUING DIRECTORS AND OFFICERS AND WHY?
shareholders
- dividend declaration
- executive compensation
- financial performance/transactions
- breach of fidu
- accounting fraud
- ciary duty
- inadequate disclosure
- inside trading
- investment of loan decisions
- loss or bankruptcy
- merger/acquisition
- stock offerings
employees
- breach of contract
- compensation disputes
- defamation
- discrimination
- benefits
- employment conditions
- failure to hire/promote
- harassment
- whistleblowing
- wrongful termination
competitors & government
- copyright/trademark infringement
- antitrust
- civil rights
- consumer protection
- environment
- taxes
- securities
- work conditions
clients/ customers
- antitrust violations
- contract disputes
- debt collections
- deceptive trade practices
- fraud
- refusal of credit
QUICK QUOTE