Trade association AIRMIC, in association with McGill & Partners, has published a new D&O guide.
The publication, Directors & Officers Liability Insurance: Perfecting Governance; Liability challenges and questions, aims to provide an insider’s guide to D&O liability insurance for end users, and for board members in particular.
Twelve questions make up the core of the guide, focusing on practical issues that commonly arise.
Although designed to be answered by reference to specific policy wordings, the answers are intended to provide general guidance as to the likely position, subject to the significant caveat that no two D&O policies are the same.
The questions are posed from the point of view of directors and board members themselves and include:
- What limit am I covered for and how do I know it is the right one for my industry sector?
- Am I covered for the right types of exposures especially with regard to emerging risks?
- What happens to my insurance protection when I leave the company?
- What happens to my insurance protection in the event that the company is acquired by or merges with another company?
According to AIRMIC, there tends to be a mystique surrounding D&O liability insurance, which often results in a disconnect between the product and its end users, creating the risk of a significant expectation gap in the event of a claim.
The reasons for this mystique include: D&O polices tend to be relatively complex; no two D&O policies are the same or even directly comparable; and the general approach of D&O insurers is to provide cover on an affirmative basis.
Julia Graham, CEO, AIRMIC, commented: “Asking the ‘right’ questions about directors’ and officers’ liabilities and insurance, before a problem arises, makes good management sense.
This guide is an important contribution to our members who support their leadership, as they collectively navigate an increasingly complex world and associated governance responsibilities.”