Coverage Gaps and Traps: One RIMS Session With the Know-How on All Things D&O
The directors and officers (D&O) liability insurance market was not left unscathed after 2018’s cyber breaches and the ongoing fallout from the #MeToo movement.
Board members are being held accountable for company-wide failings to curb misconduct and report incidents in a timely manner.
In fact, law experts say the risk of directors and officers being taken to courts by the DOJ, the SEC or others should be firmly on risk managers’ minds despite recent shifts within the DOJ.
In a recent Risk & Insurance article, Bill Leone, the head of the New York white-collar practice at the Norton Rose Fulbright law office told us: “Directors have always been exposed to prosecutions … It is only the DOJ’s emphasis that has changed in recent years.”
For these reasons, three industry professionals have joined together to talk specifically about D&O trends and policy wording during RIMS 2019 in Boston, held April 29 through May 1.
Robert Yellen, executive vice president, D&O and fiduciary liability product leader, FINEX, Willis Towers Watson; Deirdre Martin, SVP/product lead, management liability, public, financial lines, AIG; and Greg Hodgson, director of risk management, California Resources Corporation, will present on Wednesday, May 1 at 11 a.m. in Room 157AB.
“We’re going to run through very real gaps and traps from a traditional policy perspective,” said Yellen.
It’s a timely topic; with more directors and officers facing scrutiny, concerns about gaps in D&O coverage are growing.
Cyber threats, privacy, #MeToo, the relation back rule and investigation costs all feed into concerns that a D&O insurance placement will fall short of critical coverage.
Their RIMS session, Trends (and Solutions) for Critical D&O Gaps and Traps, will explore today’s D&O insurance contract certainty and coverage compliance risks.
It will also examine top coverage defense tactics and wording flags, as well as critical, innovative solutions.
“What we will talk about is universal to insurance,” Yellen said. “The challenges go deep into the architecture of claims-made policies.”
The session has three main learning objectives: Attendees should be able to anticipate and avoid potential D&O insurance gaps and traps, as well as spot opportunities to improve their programs; summarize the state of D&O coverage litigation and key trends; and prepare practical questions for this year’s D&O renewal.
Yellen also hopes attendees will be better prepared to speak to their stakeholders about today’s biggest D&O risks.
“I think they will be in much better shape to ask the questions they need of their insurance partners” after the session, he said. “We’re going to talk about solutions for [attendees] to better understand the opportunities to work with their carrier and broker, to put them in a better position with clearer wording.”
He also teased the speakers will be diving into the concept of ‘zombie claims’ — where old D&O claims might come back from the dead.
Yellen stressed in situations like these, a ‘zombie-killer endorsement’ could be the best defense.
“I learn something new every time I go to RIMS,” added Yellen. “It’s an opportunity to really plug-in with all the minds in our industry.” &