Directors and officers of both for-profit and not-for-profit organizations can sleep better at night, thanks to South Western Insurance Group Limited’s D&O liability coverage. The company’s customized insurance package, says senior liability underwriter Bessy Allen, does far more than just provide indemnification against financial loss in the event of a breach of management duty.
“Our D&O policies cover 100% of defence costs, and are predominantly geared toward protecting the management teams of a wide range of organizations. But they also include employment practices liability to protect against claims of employee harassment or wrongful dismissal, and fiduciary coverage in the event that a company’s pension plans are mismanaged.”
Both for-profit and not-for-profit organizations can – and should – carry D&O insurance, Allen adds, especially since company size plays no role in determining eligibility. “SWG’s risk appetite is pretty broad. We cover startups and smaller associations, all the way up to large corporations. We can do unincorporated companies, corporations without share capital, charitable organizations, cooperatives and condominiums, as well as First Nation bands.”
Naturally, there are some restrictions in terms of submissions that can and cannot be accommodated. The company will not typically consider high-profile risks like political parties, municipal governments, and non-profit organizations with exceptionally high revenues. They also will not look at risks that are domiciled outside of Canada. “And because insurance policies are essentially an asset,” explains Allen, “we will not cover any organization that is in poor financial health.”
But for the vast majority of organizations that do qualify, Allen says she cannot overstate the importance of carrying D&O insurance. “Many breach of duty claims stem from company shareholders, or from funding sponsors in the case of not-for-profit organizations. Without D&O coverage in place, lawsuits aimed at a company’s directors or officers could bring their individual assets – as well as those of their spouses – into play.”
Allen also recognizes the importance of reminding brokers that South Western Insurance Group Limited’s D&O policies come with a host of built-in benefits. “One of the main selling features of our D&O coverage is the fact that defence costs fall outside policy liability limits – and there are no caps on those limits. That is not a standard industry offering.”
The company’s custom package also provides certain frill coverages, including a dedicated excess $1,000,000 limit. “If a claim were to deplete a policy’s initial liability limit,” Allen explains, “the excess limit amount would kick in.” Plus, she says, there is no hammer clause in her company’s D&O policies.
“The industry’s standard hammer clause is 70/30, meaning the policyholder is responsible for 30% in the event of a judgement. But SWG provides 100% coverage, so no money has to come out of the insured’s pocket. We also include corporate brand protection and crisis event management and expense coverage, as well as a wave-off deductible in the event of no liability to protect the insured against frivolous claims.”