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June 5th 2013

D&O Insurance

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• General Information

• History

• Coverages

• Limitation

• Vendors

Curriculum

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• Directors and officers liability insurance

• insurance to manager and executive persons of of the company

• Focus on those people and not the company itself

• Covers losses and high risk decisions of executive employee

• “Personal financial protection”

•Motivates employees to take higher positions in the company

General Information

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• Developed by Lloyd‘s of London

• Established in USA in 1930‘s

• In the 1980‘s there was a „D&O-crisis“ •Many companies took the chance to procure the insurance

•As a result they added a number of clauses in the policy

the „D&O-market“ was born

• There is no standard D&O-form• They used in a similar way (shared outline)

History

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• Insurance covers multiple organs:•Management of the company

•Governing body

•General managers

•Executive positions

• Insurance comes in to action, if…•… there is no bad intention

•… there is no loose of duty to take care of thirds (customers, vendors, own company/employees)

•… the insured person is not in knowledge of a fault in the past

Coverages

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Insurance protects you from both sides…

customers

vendors

executive organs

employees

Inside the company Outside the company

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• In case of a accusation you have to keep in mind the following things:• The claimant is the person who has to proof YOUR fault

• You are not guilty until someone is able to proof a possible mistake

• If you own stock options from the company you are work for, the insurance will not cover the full amount which is involved in the case

•Usually there is a compromise between the two parties

• The insurance will not cover any costs if you did something with a bad faith

Limitation

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• Chartis

• Chubb Corp.

• The Travekers Companies

• ACE Limited

• XL Group

• Zurich Financial Services

• Allianz

• HCC Insurance Holdings

• The Hartford

• CNA Financial Group