To address various issues facing brokers and clients in the current M&A environment, XL Catlin’s Professional Lines Insurance Operations in Bermuda have created a new Directors & Officers lead excess Side A Difference In Conditions (“DIC”) policy.
Matthew Irvine, XL Catlin’s Bermuda Professional Lines Chief Underwriting Officer, said: “The current and anticipated wave of insurance company consolidations creates various issues for brokers and clients to consider under D&O insurance programs. For example, the aggregate capacity offered by a consolidated carrier may be less than the separate capacities offered by each of the carriers before the consolidation. In that case, new insurers will need to be added to programs in which both of the consolidated carriers participated. Also, if the same consolidated carrier participates in both the underlying ABC program and the excess DIC program, the quality of that carrier’s drop-down coverage is diluted because that carrier is insuring against its own wrongful refusal to pay or insolvency.
“XL Catlin’s insurance companies offer independent, high quality and service-focused Side A DIC protection which addresses these concerns. Based on our many years of exemplary Side A underwriting and claims handling expertise, we now offer a creative new lead Side A DIC policy which addresses the recent and foreseable changes in the D&O claims environment and D&O insurance market.”
This new policy includes several coverage enhancements, such as:
Reinstated Limits: Two reinstated Limits of Liability are automatically afforded for unrelated claims. The first reinstated limit applies to all insured persons and the second applies only to directors of the parent company.
Insured Persons: The definition of insured persons is expanded to include shadow and de facto directors, advisory board members, prospective directors and representatives of entity directors. Non-officer employees are also added as insured persons for securities claims and cyber claims whether or not a director or officer is a co-defendant
- Pre-Claim Inquiry Costs: Coverage for pre-claim inquiries is expanded to also include a request to an insured person for testimony or documents by any party in a proceeding in which the company or another insured person is also a party
- Discovery Periods: An automatic six-year discovery period is added if the policy is cancelled or non-renewed after the commencement of a company bankruptcy proceeding, and an automatic perpetual discovery period is added for former insured persons if the policy terminates without the company purchasing similar replacement coverage. No additional premium is required for either of these discovery periods
- New Subsidiaries: Insured persons of all new subsidiaries are automatically covered prospectively, regardless of the size of the subsidiary
“We are constantly looking for innovative ways to develop and enhance our portfolio of products,” said Patrick Tannock who leads XL Catlin’s Bermuda Insurance Operations. “This new policy is an example of XL Catlin’s ability to understand market changing dynamics and provide solutions that meet the ever evolving needs of clients.”
About the XL Catlin Insurance Operations
The XL Catlin insurance companies offer property, casualty, professional, financial lines and specialty insurance products globally. Businesses that are moving the world forward choose XL Catlin as their partner. To learn more, visit xlcatlin.com.
About XL Catlin
XL Catlin is the global brand used by XL Group plc’s (NYSE:XL) insurance and reinsurance companies which provide property, casualty, professional and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises throughout the world. Clients look to XL Catlin for answers to their most complex risks and to help move their world forward. To learn more, visit xlcatlin.com.