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Discover directors and officers liability insurance

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Welcome to Discover D&O

Discover the personal liability exposures of directors and officers, and the insurance policies designed to protect them.


Contents show
1 Duty, liability, and indemnification
1.1 Directors duties
1.2 Board of directors liability
1.3 Directors indemnification agreement
2 Types of insurance coverage
2.1 Directors and officers liability insurance
2.2 Employment practices liability insurance
2.3 Management liability insurance
2.4 D&O insurance for nonprofits
2.5 Side A coverage
2.6 Side C coverage
3 Typical policy attributes
3.1 Claims made policy
3.2 Prior acts coverage
3.3 Retroactive date
3.4 Prior and pending litigation date
4 Components of a policy wording
4.1 Wrongful act
4.2 Extensions
4.3 Exclusions
4.4 Conditions
5 Considerations for risk retention and transfer
5.1 Limit of liability
5.2 Self-insured retention
6 Arranging coverage for an organisation
6.1 Application process
6.2 Duty of disclosure
6.3 Underwriting process
6.4 No known loss letter
7 Navigating changes to a corporate structure
7.1 Change in control
7.2 Run off insurance
7.3 Extended reporting period
7.4 Discovery period
8 Claims handling
8.1 Claim notification process
8.2 Duty to defend
8.3 Claim settlement process
8.4 Claim examples

Duty, liability, and indemnification

The directors and officers of an organisation have a broad range of duties. If things don’t go to plan, they can be held responsible for their actions.

Directors duties

An organisation’s management is required to satisfy a range of directors duties in the performance of their role.


Board of directors liability

Management may be exposed to board of directors liability if they fail to perform their duties as expected.


Directors indemnification agreement

A directors indemnification agreement is the first line of defence for protecting management from personal liability.


Types of insurance coverage

Insurance is an effective way of transferring risk away from an organisation and its management, and onto an insurer. It is available in a variety of formats.

Directors and officers liability insurance

Directors and officers liability insurance protects an organisation and its management from managerial-related claims.


Employment practices liability insurance

Employment practices liability insurance protects an organisation and its management from employment-related claims.


Management liability insurance

Management liability insurance protects a small and medium enterprise and its management from a broad range of losses.


D&O insurance for nonprofits

D&O insurance for nonprofits is an important consideration for community-focused organisations and charities.


Side A coverage

Side A coverage is an important consideration for individuals in the event that they are not indemnified by an organisation.


Side C coverage

Side C coverage is an important consideration for public companies who are at risk of securities-related claims.


Typical policy attributes

There are a range of concepts that apply to insurance policies designed for management. Many of these concepts are unique, and not often shared by other policy classes.

Claims made policy

A claims made policy requires that a claim be first made against and insured and notified to an insurer within a policy period.


Prior acts coverage

Prior acts coverage describes a policy’s ability to cover acts that occurred prior to the commencement of a policy period.


Retroactive date

A retroactive date, also known as a prior acts date, can be used to restrict the prior acts coverage of a policy.


Prior and pending litigation date

A prior and pending litigation date aims to eliminate coverage for claims that have commenced prior to a specified date.


Components of a policy wording

A policy’s insuring clauses will outline its core coverages, and will work together with other aspects of a wording to formulate its overall protection.

Wrongful act

A wrongful act describes the behaviour of an insured that a claimant believes has caused them financial loss or injury.


Extensions

Extensions broaden a policy’s coverage and provides an insured with additional protection.


Exclusions

Exclusions aim to eliminate an insurer’s exposure to undesirable risks faced by an insured.


Conditions

Conditions outline the various subjectivities that attach to a policy’s operation and coverage.


Considerations for risk retention and transfer

When an organisation purchases insurance, it must decide on how much risk it should transfer to an insurer, and how much it should retain for itself.

Limit of liability

A limit of liability is the maximum amount that an insurer is liable to an insured for covered claims in a policy period.


Self-insured retention

A self-insured retention is the amount of loss that an insured must incur for a covered claim before a policy will respond.


Arranging coverage for an organisation

The are a range of processes involved in establishing insurance coverage, and making midterm alterations as required.

Application process

An application process is undertaken by an organisation to establish a new policy and replace an expiring one.


Duty of disclosure

An organisation and its management are required to satisfy a duty of disclosure to secure coverage from an insurer.


Underwriting process

An underwriting process is undertaken by an insurer to assess the risk of an insured, and set the terms and pricing of coverage.


No known loss letter

A no known loss letter is used by an organisation to declare that it is not aware of any undisclosed claims and circumstances.


Navigating changes to a corporate structure

There are a range of situations where changes to an organisation’s ownership or corporate structure can have a material effect on its insurance coverage.

Change in control

If an organisation is subject to a change in control during a policy period it will result in a conversion of coverage.


Run off insurance

Run off insurance often describes the practice of purchasing coverage to protect an organisation’s long-tail exposure.


Extended reporting period

An extended reporting period may be available to an organisation following a change in its corporate structure.


Discovery period

A discovery period may be available to an organisation in the event that it does not, or cannot, replace a policy.


Claims handling

Insurance is often purchased with the hope that it will never be required. Realistically, however, it may only be a matter of time before claims need to be considered.

Claim notification process

The claim notification process describes how an insured will need to notify an insurer of any claim or circumstance.


Duty to defend

The duty to defend an underlying claim may be the responsibility of an insured or insurer, depending on a policy’s structure.


Claim settlement process

The claim settlement process describes how an insured may seek to resolve a claim and recover any loss from an insurer.


Claim examples

Claim examples are useful for understanding some of the risks faced by an organisation and its management.


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