Buyer, be prepared
Over the last decade, private company Management Liability policies (Directors’ & Officers’ Liability, Employment Practices Liability, Fiduciary Liability) have been very competitively priced with generally loose underwriting guidelines. But, as a famous Greek philosopher once said, “Nothing endures but change” – and we are currently in the midst of a pendulum swing towards stricter underwriting.
Management Liability underwriters with leading insurers, including Arch and Chubb, have confirmed that complete applications, with all requested supplemental information, have become the new norm. In addition to encountering more rigid underwriting, most companies are also likely to be subject to some combination of: higher retentions, higher premiums, and/or reduced coverage/capacity.
There are steps that companies can, and should, take to minimize surprises and maximize results:
- Start early – at least 60 days ahead of renewal.
- Complete the application and provide all of the attachments noted below.
- Discuss the answers to the questions noted below with your broker. These are all situations which could significantly impact an underwriting assessment of your company’s D&O related liability.
- If you have any event which may give rise to a Claim (either now or in the future), discuss it with your broker to determine how it should be addressed.
|D & O||EPL||Fiduciary||K, R & E||Crime||Employed Lawyers’|
|Most recent annual audited financials
|Most recent interim financials
|Current list of Board of Director members
|Most recent 5500s for all retirement plans||√|
About the Author
Michael Sullivan is a Client Service Manager in the Property & Casualty group and member of the High Tech team at William Gallagher Associates. His responsibilities include negotiating renewal insurance programs with a variety of clients in the Technology, Energy and Clean Technology industries.