20 Ways To Improve D&O Coverage

Download FREE Report: 20 Ways To Improve Directors and Officers Liability Coverage or Practices

Directors and officers (D&O) liability insurance is a complicated line of coverage that requires special expertise. Understanding the proper application of D&O coverage forms and keeping abreast of developments that affect the D&O insurance field can be challenging. Knowing what characteristics to be on the lookout for when analyzing D&O coverage forms, such as “claim” definitions, extent of entity coverage, severability language in exclusions, and defense provisions, can help distinguish you from other D&O insurance and risk management professionals.

In this practical guide, IRMI Research Analysts Bob Bregman and Sean Jordan provide 20 specific, straightforward tips that can help maximize coverage, minimize exposures, and mitigate the potential for claims denials. Each of the tips was chosen based on their importance, timeliness, and practicality, and fall under four categories: D&O coverage basics, D&O defense provisions, D&O exclusions, and excess D&O coverage.

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Topics Included in 20 Ways To Improve Directors and Officers Liability Coverage or Practices

D&O Coverage Basics
An understanding of D&O coverage basics, such as the three key insuring agreements (directors & officers, corporate reimbursement, and entity securities), is crucial in purchasing the broadest possible policy. Other key D&O elements addressed in this section include severability, definition of “claim,” extended reporting, and retention provisions.
D&O Defense
Defense provisions in D&O policies are among the most important policy terms. In this section, you will learn how to spot crucial variations in defense wording, the importance of “all allegations” defense coverage provided by duty to defend forms, and techniques to make counsel selection provisions work in your favor.
D&O Exclusions
Having the knowledge to negotiate essential modifications to D&O policy exclusions can vastly expand the scope of coverage that the policy will ultimately provide. Some of the exclusions discussed in this section include the prior and pending litigation exclusion, bodily injury/property damage liability exclusion, and the major shareholder exclusion.
Excess D&O Coverage
Avoiding so-called “strict” exhaustion provisions in excess D&O policies is important in steering an insured clear of (1) coverage disputes and (2) receiving less than full reimbursement for a loss that penetrates a D&O program’s primary layer of coverage.

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