Directors & Officers Insurance and Employment Liability Practices Insurance
DIRECTORS AND OFFICERS LIABILITY
Defense Costs and Damage Costs are expensive
Wrongful acts can include allegations and lawsuits brought against an organization’s Board of Directors and/or Officers
Protect your executives or risk losing them from fear of lawsuit exposure
Protect your directors and retain/attract the best directors for your organization
Directors & Officers coverage is a claims-made and reported policy form. It is designed to protect your executives and officers, including their individual assets and those of their spouses. Exposures can include:
Bankruptcy or insolvency
Contractual Disputes from vendor contracts
Shareholders disputes and lawsuits
Civil, and regulatory proceedings based on actual or alleged acts, omissions, misstatements, neglect, or breach of duty
These are just some of the types of policy coverage available. Specialty coverage for non-indemnifiable losses, known as a SIDE A policy form, can be obtained for some classes of business.
According to a recent report** by Advisen and AIG: “The report notes that private company D&O claims are varied in the source and in their process. While there is a perception that shareholders are the principle source of D&O claims, ‘this perspective overlooks the fact that the plaintiffs in D&O claims include a much broader array of claimants than just shareholders. D&O claims plaintiffs also include customers, vendors, competitors, suppliers, regulators, creditors and a host of others.”
**The Private Eye: Spotlight on the U.S. Private D&O Market” (here) dated August 13, 2013 and summarized by Kevin LaCroix on September 11, 2013in Advisen
Employed Lawyers, Fiduciary Liability, and Cyber can be added in some cases. Policy forms and coverage depend on the classification of business.
EMPLOYMENT PRACTICES LIABILITY INSURANCE (“EPLI”)
Major employee issues can face employers including discrimination, harassment, termination, and retaliation. Issues with background checks, employee internet usage, and privacy laws are added to the mix when hiring, promoting, or terminating an employee. Fair Labor Standards Acts claims can also be an issue. Any of these instances can be devastatingly expensive to defend against. EPLI was created to insure against those risks and the costs associated with them.
The claims made and reported policy forms for EPLI provide defense costs and damages related to the cost of legal defense, settlements, punitive damages and other court fees if your business is charged or sued for violating a person's or group's civil rights or failing to provide a fair, acceptable environment for them to complete their work. Most carriers offer Risk Management Tools, Webinars for Employees, and Complimentary Employee Handbook Software. Free consultation time with a human resources consultant or attorney is usually available as a part of the policy. Most policies can add third party discrimination. In today’s litigious environment, agencies cannot afford to leave these risks uncovered.
Defense Costs to defend your firm can be costly. Cases can extend over a period of years. Allegations of invasion of employee privacy, or libel, slander or wrongful discipline can lead to emotional or mental distress. Defense costs and Damages for cases can easily reach millions of dollars but on average, to just respond to the initial allegations could cost as much as $40,000 – or even more. If the allegations turn out to be true, the court may assess compensatory and punitive damages.
Coverage types vary and firms with one employee are eligible. Average premiums can be as low as $730 for firms with one to five employees. EPLI Coverage can be combined with D&O coverage.