Executive Liability Solutions

The kind of nimble risk options that just might save your clients’ assets.

assets

Executive Liability Solutions is an independent specialty wholesaler with expertise in multiple lines of insurance — from something as complicated as finding out that your CEO (who’s the now-deceased owner’s childhood companion) is having an affair with the heiress step-daughter of the lead designer on your competitor’s flagship product . . . to something dull, like you just received a death threat from a drug cartel holed up in the mountains of one of your company’s South American locations.

The following is an exhaustive list of the many products we offer at Executive Liability Solutions:

Directors and Officers Liability

Public

Coverages

  • Directors and Officers Liability
  • Corporate Indemnification
  • Corporate Securities Liability
  • Dedicated Side-A Limits
  • Shareholder Derivative Demand Investigation Costs
  • Outside Directorship Liability

Key Questions to Ask:

  • Does your program respond to a criminal investigation or proceeding?
  • Does your policy protect the “innocent” directors and officers if fraud has occurred?
  • Will your policy remain in force if fraud has occurred?
  • Does your policy and application provide full severability of insureds?
  • Does your policy contain an allocation provision and are you certain as to how it applies?

Private

Coverages

  • Directors, Officers, and Corporate Liability
  • Employment Practices Liability
  • Fiduciary Liability
  • Outside Directorship Liability

The aforementioned coverages can be written on a monoline basis or, to achieve premium efficiencies, can be written under one aggregate limit of liability. Most policies guarantee an IPO quotation, subject to an additional premium and underwriting, and also offer a blanket private placement of securities coverage.

Side-A Directors and Officers Liability Coverage

Policy Features:

  • Dedicated limits to the individual insured persons- the limit cannot be impaired or exhausted by corporate liabilities
  • Non-rescindable and non-cancelable contracts
  • Full severability
  • Favorable language found in the personal conduct exclusions
  • Fewer, less onerous exclusions, than the standard D&O policy
  • Side-A can be purchased as Primary or Excess / DIC
  • Available limits exceed $500 million

Outside Directorship Liability (“ODL”)

Coverage Features:

This extension affords coverage for an Insured Person serving in the capacity of a director of an Outside Entity. The ODL coverage can be written as triple or double excess.

Hypothetical Claim Scenarios

  • A derivative action by the Outside Entity against its board of directors exhausts the Outside Entity’s D&O liability limits.
  • The Outside Entity’s D&O policy may contain more restrictive language with respect to fraud and / or personal conduct exclusions.
  • The Outside Entity files for bankruptcy and does not have the financial means or is not required / allowed to indemnify its Ds and Os.
  • The Outside Entity is financially insolvent, and it is readily apparent that the liability available to the directors and officers of the Outside Entity far exceeds the D&O policy limit.
  • The outside director may attempt to settle with the plaintiff’s in exchange for dismissal from the Outside Entity’s Securities Class Action suit. The outside director may attempt to secure proceeds from the ODL insurer for the personal settlement; or,
  • The plaintiffs seek a settlement in excess of the available D&O limit of liability, which may require personal contributions by the outside directors.
  • The Outside Entity is merged and no longer exists as a legal entity. The D&O liability policy and the run-off coverage (if applicable) have expired. Subsequently, the SEC brings suit or a formal investigation of fraud.

Mergers and Acquisitions

Representations and Warranties Insurance is designed to protect the Buyer from a Seller’s breach of a representation or warranty of a Sale Agreement. The coverage can also be a useful negotiation tool for the Seller should the Buyer require funds be left in escrow for a certain amount of time. For example, if the Buyer mandates that $3,000,000 of a $30,000,000 sale transaction be left in escrow, the Seller may be able to replace the escrow fund with R&W insurance. The benefits to both parties are readily evident as the Seller receives their proceeds and the Buyer is protected with insurance.

Each deal is unique and thus the coverage is generally written on a manuscript policy form, however specimen forms are available for review.

  • Private Equity and General Partnership
  • Healthcare, including Hospitals, Managed Care and Physician Groups
  • Investment Managers, Hedge Funds
  • Non-Profit Associations
  • Errors and Omissions / Miscellaneous Professional Liability
  • Fiduciary Liability / Pension Trust
  • Employment Practices Liability
  • Medical Malpractice Insurance
  • Architects and Engineers Errors and Omissions
  • Crime / Employee Dishonesty
  • Kidnap, Ransom, and Extortion

Exotic stuff, eh? Want to hear more? Call or email us and we’ll make your ears / eyes tingle with excitement.

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