A directors and officers policy provides coverage to the insured directors, officers, trustees, employees or volunteers of the company, and or, any member of the staff, faculty, or duly constituted committee of the company. The policy provides coverage for defense costs and liabilities incurred by the insured arising out of claims alleging that an insured has committed “wrongful acts,” which means any error, misstatement, misleading statement, act of omission, neglect or breach of duty by policy definition. This coverage specifically excludes bodily injury or property damage claims which would likely be covered by the general liability policy. This policy also provides coverage for wrongful termination(s), harassment and other employment related situations.BEGIN APPLICATION DOWNLOAD PDF APPLICATION
1. Any claims made from stockholders, employees, and clients will be made against the association, AND against the directors of the company. Rather than being held personally responsible for acts of the company, most directors and officers will demand to be protected rather than put their personal assets at risk.
2. D&O gives the organization the ability to attract the best possible outside directors. Investors and members of your board of directors will not be willing to risk their personal assets to serve as a corporate director or officer. D&O coverage will protect the assets of the spouses, heirs and estates of the Directors and Officers.
3. Employment practices suits constitute the single largest area of claim activity under D&O policies. Over 50% of D&O claims are employment practices related.
4. D&O coverage can fill in gaps left by a commercial general liability policy.
5. Competitor Claims (Anti-trust, Unfair trade practices).
Coverage is provided for wrongful termination of an employee, breach of any oral or written contract, violation of employment discrimination laws (including harassment), wrongful failure to employ or promote, employment related wrongful infliction of emotional distress.
The club itself and its Board of Directors would be provided coverage for suits brought against them as a result of disciplinary reasons. Parents sue the club and coach alleging the athlete’s chances of making a meet cut or qualifying time was impeded due to disciplinary action.
We have a claim currently resulting from a club denying membership to a family. The club does have a right to deny membership. However, suit was brought against the club for the denial. The D&O policy is defending this claim.
REPORTS OF OCCURRENCE (ROO)
We had a situation where a club had not filed a Report of Occurrence on an incident that happened in April 1995. The injured party had surgery to repair a tendon. The parent’s primary insurance carrier did not pay for the majority of the expense for the surgery.
The surgeon ended up turning the family over to a collection agency. Interest, fees and court costs amounted to over $2,500. The family brought suit against the club for failing to file the ROO in a timely manner as the Secondary Accident coverage would have picked up the unpaid amount due to the surgeon.
Of course, one of the major coverage parts provided by a D&O policy is for bad investment decisions. Most of the member clubs do not have enough money to be concerned about this aspect of coverage. This is the coverage part of the D&O under which the RTC and Government were able to recoup some of the losses resulting from the savings and loan failures (bad real estate investments.)
Protects the club against losses caused by dishonest acts of employees, or volunteers whether identified or not, acting alone or in collusion with other persons with the intent to cause a club a loss and to obtain financial benefit.
THEFT, DISAPPEARANCE AND DESTRUCTION
Protects the club against non-employee theft of money or securities inside the premises or banking premises.
CRIME INSURANCE COVERAGE
Limits: Max of $25,000 each loss.
Cost: See rating guide on application.
(Rates apply to clubs without previous loss history.)