D & O INSURANCE
THE PANDEMIC , IN MANY WAYS , CREATED D & O EXPOSURES THAT WERE NOT THERE BEFORE .
Even if you are not liable for any damages , you will still be on the hook for defense costs , which is something we see many businesses forget to consider . Businesses with a complete management liability policy have these costs covered by their D & O insurance .
Prior to COVID , the market had plateaued , and we were starting to see reductions in premiums for many of our clients . However , D & O insurance rates are now on the rise because of the increasing number of claims .
COVID-related claims are something the insurance market has not seen before , so we are experiencing some pushback from insurance carriers as they work to recalculate premiums , coverage , and deductibles based on this new information .
While premiums and deductibles are going up , some insurance carriers are withdrawing portions of D & O coverage . D & O insurance typically contains three parts : coverage for the faults of individual directors and officers , agreements to reimburse a board member for costs related to a lawsuit , and coverage for the entity itself . In response to COVID-related claims , some carriers are refusing to offer full coverage in all three areas .
FROM OUR PERSPECTIVE AS ADVISORS , ANY BUSINESS WITH A CORPORATE BOARD OR ADVISORY COUNCIL SHOULD CONSIDER INVESTING IN D & O INSURANCE AS SOON AS POSSIBLE IF THEY HAVE NOT ALREADY .
This includes not-for-profits and small businesses , which fall victim to these lawsuits more often than you think .
If you have any questions related to changes in D & O insurance coverage or your management liability policy , give your local GIS office a call and we will be happy to get you the answers and coverage you need . +
MARK BEHRENDT , CPCU , AU , AINS , BUSINESS RISK ADVISOR , GENERAL INSURANCE SERVICES
Mark Behrendt was born and raised in Michigan City . Mark started his insurance career in 1981 with Liberty Mutual . He then held an Underwriting Management position with Hanover Insurance Company before joining General Insurance Services . Mark ’ s professional designations include Chartered Property Casualty Underwriter ( CPCU ), Associate in Underwriting ( AU ), and Associate in General Insurance ( AINS ). He is also Past President of the Board of Directors for the Porter County Building Trades Association , which sponsors construction of single-family homes by local high school students . Mark and his wife , Julie , reside in Chesterton , Indiana , where they raised their 2 daughters . He enjoys golf , hiking , sporting events , and spending time with his family .
7