View this article online: https://www.insurancejournal.com/news/international/2010/06/07/110477.htm
According to Dan Barton, Managing Director of Professional Risks at Cooper Gay, the London-based independent wholesale, reinsurance and specialist retail insurance broker, “many international companies with subsidiaries spread across the globe do not have adequate controls in place to ensure they remain both compliant and sufficiently protected against D&O claims as a result of changing local requirements.”
Barton told delegates at Last week’s Wells Fargo Global Broker Network Conference in Madrid, that many companies purchase global D&O policies with local limits to cover their needs across their subsidiary network. However, there is a raft of potentially complex local requirements that must be fully complied with in order to assure cover.
“Different jurisdictions have their own requirements, but most have conditions around the need for a local broker, premium payment and collection, local policy issuance and language, local taxes and stamp duties, minimum rates or minimum limits of liability,” Cooper Gay’s bulletin noted. “Consequently, even though a policy may state that there is global coverage, the policy won’t respond unless the insured is fully compliant with these restrictions. Unfortunately, to add to the complexity, local requirements vary enormously across different jurisdictions and can change regularly.
Barton warned delegates that “companies with overseas subsidiaries may assume that buying a global D&O policy ensures they are covered wherever they operate. However, unless they have controls to make sure they are compliant, this may be a false assumption.
“The danger is that in a claim situation they may not be able to collect on their global policy, leading to a multitude of complications – and possibly considerable costs to the business. As with all global coverages, it is vital that companies choose D&O insurance providers with a proven track record in arranging international protection, and which have a pro-active team in place to provide warnings of potential problems and suggest workable solutions.”
Source: Cooper Gay