Directors and Officers Liability Market Firming: Towers Watson

March 14, 2013

  • March 18, 2013 at 11:58 am
    Producer #1 says:
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    D&O policy language varies greatly from carrier to carrier. These are not ISO forms, so unlike other insurance forms there is not standardization.

    As a result, don’t just shop the coverage because there is a price increase. If an insured asks their agent to shop this line of coverage, the agent had better do your homework. Remember its the agents E&O on the line if the new company declines a claim that the old company would have paid. I submit to you that an agent to think long and hard before recommending a move away from the incumbent D&O carrier. If an agent does make such a recommendation, then they had better understand the coverage form they are leaving, as well as the coverage form that they are newly purchasing. Also, since these policies are claims made, there is an additional E&O exposure for the agent. In other words, the retro date means that you are now insuring the past with a new coverage form. What if the new coverage form is different, if so, the insured now has different coverage going backwards as well as going forward.

    Since there is little standardization in D&O forms, I think that an agent has a lot of homework to do should their insured want to shop this line of coverage.

    … by the way, the same lack of standardization exists with E&O forms.



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