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Professional Liability / D&O
Professional Liability [back to top]
Professional liability insurance is important coverage for any occupation which can be defined as service based, and where special knowledge, skills and close client relationships are what distinguishes them from their competition.
Some of the most common examples of these include advertising agencies, architects, lawyers, bankers, clergy, engineers, insurance agents, and stockbrokers. This category of coverage is one of the largest and growing, due to an increase in the type and number of service businesses, as well
as the potential for claims.
The two most common suits are for breach of contract and negligence in the performance of services. The financial consequences of such suits, including the costs to defend them, can be disastrous to these businesses.
Some additional examples of businesses who could benefit from professional liability insurance include:
- Computer consultants (cyber liability)
- Environmental consultants
- Mortgage brokers
- Messenger/courier services
- Telephone answering services
- Travel agents
- Financial planners
- Home inspection companies
- Photographers
- Printers
- Public relations consultants
- Real estate agents/brokers
- Software developers
- Temporary employment agencies
- Medical Professional Liability
- Medical Professional liability
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- Private Company Management liability
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Directors & Officers [back to top]
Directors and Officers (D&O) liability insurance is designed to protect the personal assets of corporate board members and officers against lawsuits arising from actions or decisions made on behalf of the organization they serve.
Directors & Officers Liability Insurance insures the personal assets of board members and officers [as well as the company's corporate assets] from lawsuits arising out of their capacity as directors or officers of the entity.
Directors and officers liability insurance has become a mainstay in the portfolios of Fortune 500 companies, as well as any company (for profit or not for profit) that requires protection for those individuals making key decisions on behalf of the covered entity.
In the corporate world, it appears to have become a common reaction that, when a company's stock drops significantly in price, investors will charge the corporations, and their directors and officers, with securities fraud. Inadequate or inaccurate disclosure including financial reporting, and claims related to stock offerings continue to be named as the single most important issue in shareholder claims; a statistic that has doubled in the past twelve years.
The latest Tillinghast study* shows that the average claim, regardless
of source, was about $5.65 million-up more than 75% from last year. Claims from shareholders averaged a record high of $17.18 million.
Purchasing D&O coverage involves much more than just pricing; it also involves the quality of the D&O insurance product, as reflected in the breadth of the coverage wording. There are a number of insurance companies offering directors and officers liability policies with no two forms being the same. That is why we have a dedicated team of professionals whose sole job is to keep abreast of the legal environment and the D&O marketplace.
Download Articles [back to top]
If you're looking for more information on D&O, check out these links:
*Source: Tillinghast-Towers Perrin 2001 Directors and Officers Liability Survey
Errors & Omissions (Professional Liability) [back to top]
Errors & Omissions coverage is for liability resulting from errors or omissions in the performance of professional duties. It is most applicable to professional business activities such as banking, accounting, law, insurance and real estate.
Employment Practices [back to top]
Employment Practices Liability, often referred to as EPL, has become a common addition to a company's insurance portfolio as EPL claims have dramatically increased in both frequency and severity in the last ten years. The single most significant increase in the incidence of claims made against directors and officers and their organizations in recent years has been due to employment practices liability.
EPL insurance typically protects directors, officers, employees and/or the company against employment-related claims brought by employees and, in certain circumstances, specified third parties. The intent of EPL is to provide coverage for wrongful dismissals (representing about 27% of all claims), breach of contract (8% of claims), sexual/harassment (13% of claims) and discrimination (almost 36% of all claims).
This coverage can be obtained either by endorsement to the D&O policy or as a stand-alone policy.
For Publicly Traded Companies it is often recommended that they purchase a stand-alone policy for Employment Practices. This will protect the D&O limits from being depleted for EPL claims and saved for traditional D&O losses. For Privately Held Companies it is possible to get a very broad combined D&O and EPL policy at a very competitive price. It is important to review the wording in the policy to determine the breadth of coverage being offered.
Lawyers Professional Liability [back to top]
One of the most common problems that triggers a lawyers professional liability claim is missing deadlines.
An inefficient diary system or failure to act on a timely basis results in many claims against law firms.
The top ten reasons for lawyers professional liability claims are:
- Missing Deadlines
- Lawyer Stress and Substance Abuse
- Conflicts of Interest
- Ineffective Client Screening
- Inadequate Research and Investigation
- Poor Client Relations
- Overzealous Efforts to Collect a Fee
- Poor or Inadequate Documentation
- Inappropriate Involvement in Clients businesses
- Unwillingness to believe you might be sued
Miscellaneous Coverages [back to top]
Some of the coverages we can provide include fidelity bonds, fiduciary liability, kidnap, ransom + extortion, commercial crime and representations + warranties.
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