Hiscox Launches New D&O Policy

The U.K.’s Hiscox Insurance Co. has launched of a new management liability policy developed to cover the liabilities of U.K. companies, their directors and employees.

Hiscox said it had revamped the coverage “to address the significant rise in current and future legislation including the Company’s Bill, the main provisions of which are expected to be effective in April 2007, and the new Age Discrimination laws due in October 2006.”

The need for a new policy highlights the effect of increased calls for company transparency and management responsibility in the U.K. and throughout the European Union. It is also a response to increases in litigation against officers, directors and employees.

Hiscox said its “Management Liability Portfolio is the first ever risk management package that combines comprehensive cost effective insurance protection with access to free online human resource (HR) support. Management Liability Portfolio gives clients the flexibility to tailor the product according to their business needs, combining cover for directors and officers’ (D&O) liabilities with employment practices liability and corporate legal liability.

“The online HR service provides a comprehensive online audit of existing employment practices and access to a wide range of HR policies, procedures and documents which can be customized and downloaded on demand.”

Callum Taylor, D&O Underwriting Manager, commented: “The need for companies, directors and employees to have suitable protection from legal action brought against them is growing, as more and more legislation and regulation is introduced and litigation becomes the norm. With the list of potential claimants so wide, including regulatory bodies, employees, customers, suppliers, creditors and even competitors, it is obvious that UK companies and directors must have appropriate protection.”

The Management Liability Portfolio features include the following for
Directors and officers’ liability:
— Claims against directors, officers or employees for corporate manslaughter
— Legal costs of an investigation where no allegation of wrongful act is made against a director e.g. health and safety investigations
— Claims brought by the company and fellow directors or employees
— Defense costs up to full policy limit for pollution claims
— 72 month discovery period for retired directors in the event of non-renewal of policy
— Policy non-rescindable (other than for non-payment)
— Additional £100,000 [app. $190,000] defense costs in event of limit exhaustion.
Additional options include for Employment practices liability include:
— Wide definition of ‘insured’ including the company, subsidiaries and all employees
— Third party cover including actions arising from harassment or discrimination by an employee
— Legal costs of an investigation where no allegation of wrongful act is made
— Excess reduction following online HR audit.
Corporate legal liability
— Defense costs and awards arising from shareholder claims
— Defense costs and awards arising from investors, customers, suppliers, creditors and competitor claims
— Legal costs of a health and safety investigation where no allegation of wrongful act is made.

“Separate limits are available for each section, ensuring that cover for directors, officers and employees is not affected by a claim brought against the company. Additionally, some businesses may be eligible for their policy to be written on continuous cover basis, negating the need to fill in annual application forms and providing the reassurance which continuous protection brings.”