D&O Coverage 101
When individuals leading your organization do not act responsibly, you are liable. D&O EPL or directors & officers and employment practices liability protect you and others who are in positions of leadership from the acts of your employees.
Basics of D&O
In D&O litigation, your company and its board face litigation. Directors and officers cover the members of your boards and other leaders. In a D&O plan, any officer, director and employee can have insurance under the plan. The insurance company defends claims and pays on behalf of most judgments.
Basics of Employment Practices Liability
Employment practices liability further protects your staff. This insurance covers directors, officers, volunteers and employees. EPL covers employment-related discrimination, wrongful discharge and sexual harassment.
The Cost of D&O
D&O claims are expensive. While this may lead to some people deciding against this type of coverage, you don’t want to be without protection. For instance, a plan might cost you between 35,000 dollars and 100,000 dollars. However, when it comes to a judgment you have to pay, it might cost you around 450,000 dollars.
D&O EPL coverage is crucial to your company. It protects you and your staff, particularly those in leadership positions. When you have a leadership position, you are more at risk for being held liable for certain costs and damages.
insurance agent professional liability
Insurance agent professional liability, also known as E&O (errors and omissions), is treated much like malpractice in other professions. Its strict definition states that E&O liability occurs whenever an agent causes financial loss to a client. Here are three important tips to help agents understand this important liability:
Policies Are Issued on a Claims-Made Basis
E&O protection does not cover the term of the execution or completion of the work product. The policy must be in effect when the claims are made. That generally means that an agent should maintain an active policy throughout the liability period of any work product.
E&O Does Not Cover Client Conflict Resolution
A common occurrence in the insurance world is an accusation by an agent client that the agent caused financial harm by stealing away a client’s customer. These types of situations are not covered under general E&O policies, and should be addressed with another type of coverage.
E&O Liability Is Not Necessarily Related to the Quality of the Work Product
Agents who carefully proofread their work and limit the number of mistakes are not necessarily any better off as far as E&O liability is concerned. Lawsuits are often less about the quality of the work, and more about the expectations of the clients. For this reason, E&O protection is important, even for agents who have never been sued.
Agents should contact their local insurance provider to provide a personal estimate of their insurance agent professional liability.