When an organisation is subject to a change in control, there are significant consequences for its insurance coverage. There are important decisions to be made, not only by an organisation’s existing management but also by its future leaders. If they fail to adequately prepare in advance, everyone involved may be exposed to unnecessary risk.
In this article, we will explore the concept of change in control in the context of the following coverages:
- Directors and officers liability insurance
- Employment practices liability insurance
- Management liability insurance
- D&O insurance for nonprofits
You may also find that similar concepts apply to a broad range of financial lines insurances, such as professional indemnity insurance, cyber insurance, and even crime insurance to a certain extent. Keep in mind, however, that each policy is strictly interpreted according to its own terms and conditions.
Contents
1 Change in control: A definition
2 Its relationship to a claims made policy
3 The significance of prior acts coverage
4 Why is a change in control clause necessary?
5 How a policy’s conversion effects coverage
6 Why should an extended reporting period be considered?
7 How to establish new coverage for future acts
8 Change in control: An example
9 Conclusion
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