Directors and Officers Insurance Claims

Claims can come from many sources, employees, regulators, shareholders, creditors, customers, etc. Ever-changing regulations, increased employee awareness of employment rights and the rise of shareholder activism means directors are more frequently at risk, translating to rising claims and escalating settlement cost.

A "fraud" exclusion is typically included in a D&O policy, which eliminates cover for losses due to dishonest or fraudulent acts or omission, or wilful violations of any statute, rule or law. D&O cover can be tailored to your needs, but be aware that D&O insurers are not consistent with their policy forms. This fact, plus the complexity of D&O claims, requires the insurer to have market commitment and deep expertise, as well as the financial resources to handle potential claims.

There are also additional forms of cover to adequately protect directors and officers, including:

• entity cover;
• payment priority for insured persons;
• severability of the insured as well as severability of the application;
• cover over time, meaning cover responds to past, present and future directors and officers;
• pay on behalf clause; and
• duty to defend clause

Whether you're a not-for-profit, privately held or a public company, it is likely that your business can benefit from a D&O policy. Since there is no such thing as a "standard" policy, a professional broker is invaluable when purchasing D&O cover. We understand your organisation and can knowledgeably help design policy language to meet your needs.