Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Directors & Officers Liability
Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Disclaimer Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This book is intended as a general guideline and might not apply to a specific situation. Information which is copyrighted by any proprietary to Insurance Services Office, Inc. (“ISO Material”) is included in this publication. Use of the ISO Material is limited to ISO Participating Insurers and their Authorized Representatives. Use by ISO Participating Insurers is limited to use in those jurisdictions for which the insurer has an appropriate participation with ISO. Use of the ISO Material by Authorized Representatives is limited to use solely on behalf of one or more ISO Participating Insurers. The author and any organization for which this seminar is conducted shall have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this book. Contact Info:
Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Executive Liability Exposure for Directors, Officers, Members, Partners 3
Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Executive Liability Many different legal principles apply Essentially actions of management caused financial harm Entities Corporations Associations Partnerships LLCs 4
Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Who Needs This Coverage? Partnerships Partners / Managing Partners Partnership Limited Liability Companies Managing Members or Managers LLC Corporations Directors and OfficersCorporation 5
Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Why? The persons in charge of the company can be held PERSONALLY LIABLE Covered under CGL, BAP, Umbrella for Named Perils Need coverage under D & O for Business Risk exposures 6
Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Personal Liability Exposures Shareholders Elect Board Board Elects or Appoints Executives Both positions create personal liability (fiduciaries) 7
Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Common Law Duties Duty of Loyalty Duty of Care Duty of Obedience 8
Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Insurance Community Center A Center For Learning, A Community For Sharing Find us on LinkedIn & Facebook! Duty of Loyalty Must not use trusted position to further personal interests Must act on behalf of company with undivided loyalty Must prove any personal transaction was fair and reasonable to the company 9