| Privately owned, closely or family-held companies, both large and small, benefit
from the protection the ELD offers in its Directors' and Officers' (D&O) liability
coverage. Our newest, all-inclusive D&O policy, ExecPro®, not only incorporates
all of the enhancements to traditional D&O policies, it also offers several
new coverage features as well.
Private D&O Liability
Private companies, regardless of size and nature of business, may face employment
claims as well as claims from competitors, customers, suppliers, creditors,
the federal government, and even shareholders. In today's economic environment,
corporate directors and officers are routinely named in litigation arising from
these situations. To help protect companies in such instances, the ELD offers
the Directors' and Officers' (D&O) Insured Entity and Employment Practices Liability
Insurance Policy, also referred to as ExecPro® Management and Corporate Liability
Protection. With $25 million in available capacity on a primary or excess basis,
the ELD can customize a policy to fit the needs of private businesses. In addition,
companies with less than $100 million in assets and fewer than 300 shareholders
qualify for our Middle Market Program. Preferred premiums, retentions, and coverage
enhancements are available specifically for these closely held or family-held
businesses. Please read further to learn about the benefits of the policy.
Coverage benefits typically available for private companies include:
- Entity Coverage – This expanded policy feature will pay on behalf of the
company all loss that the company is legally obligated to pay, subject
to the terms and conditions of the policy. The policy is structured to respond
to suits naming only the company without requiring coinsurance. Company liability
may arise from shareholder, competitor, supplier, customer, and other third
party claims.
- Employment Practices Liability (EPL) – Our private company ExecPro® D&O
package includes expansive EPL coverage with one of the broadest definitions
of Employment Practices Wrongful Act available in the marketplace today. An
Employment Practices Wrongful Act includes but is not limited to twelve separate
and distinct employment exposures including discrimination, harassment, and
wrongful termination. The bodily injury exclusion is amended for EPL claims.
- EPL-Only Retention – On selected accounts we will eliminate the retention
for all claims other than employment practices claims.
- Duty to Defend – For no additional premium, we will modify the policy to
provide duty to defend wording. With this wording, the insureds will be allowed
to reassume the defense of a claim upon written approval by the ELD. Costs
of defense will continue to be included within the limit of liability.
- Broad Definition of Employees – Past, present, future, part-time, seasonal,
and temporary employees are all included as insureds. Employment practices
claims also include any claim brought by contract employees, including leased
employees and independent contractors. For preferred accounts we will also
consider offering Third Party Liability Coverage for Business Practices Wrongful
Acts, such as harassment and discrimination.
- Punitive Damages – Our definition of loss includes punitive or exemplary
damages, the multiple portion of any multiplied damage award in any claim,
if such damages are insurable under law, and includes most favored venue wording.
This broadening feature does not contain sublimits or coinsurance.
Optional coverages and other coverage enhancements include:
- Fiduciary Liability Coverage – This optional coverage can protect insureds
against claims for a wrongful act constituting a breach of fiduciary duty
in the operation of any plan of the company or in the administration of any
welfare benefit plans of the company.
- Other Coverage Enhancements – Outside directorship liability, an expanded
notice of claim, spousal coverage, broad definition of claim (including written
demands and EEOC proceedings), no SEC exclusion, no major shareholder/family
exclusion, low retentions, and many other broadening features.
For your benefit, the ELD offers A Guide for Privately Owned or Closely Held
Companies, which contains information about the importance of having Directors'
and Officers' Liability Insurance as well as examples of actual claims. The
ELD also has a special program providing D&O liability protection to members
of the Employees Stock Option Plan Association.
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