Directors and Officers Insurance (D&O)

The Changing Insurance Landscape for Directors & Officers Liability Insurance:

Since 2007, Private and Not-for-Profit Management Liability (D&O) has experienced prolonged flat to declining rates and an expansion of coverage. It’s been over 20 years since we’ve seen what is categorized as a ‘hard market’ in this sector of coverage.

This segment has been maturing, with higher claims frequency and severity, directly resulting in increased loss & defence costs. North America’s growth in GDP is increasing exposure in the D&O Sector driving continued rate increases, underwriting scrutiny as well as the capacity issues we’ve seen emerge for Profit and Not For Profit entities alike.

Some of the key contributors to this are increasing M&A activity, social inflation, increasingly complex business ventures, and growing cybersecurity concerns, all of which can land right on the doorstep of Directors & Officers Liability.

Emerging out the pandemic see’s Canadian insurers making changes to their coverages that fall in line with the rest of the global insurance marketplace. Reinsurers globally are now requiring explicit virus and bacteria exclusions. Insurers anticipate that in the wake of the pandemic, D&O is one line of business that could see increased claims activity, principally in the Employment Practices silo of coverage, a typical extension under the D&O policy.

It's not all doom and gloom, while there is no question that we are impacted by the global insurance marketplace, Canada remains much better off then the US for example, which is more litigious and does not have the benefit Canada’s corporate statutes that somewhat limit the ability for shareholders to seek compensation as easily or as generously.

Questions? Speak to one of our Corporate Risk Advisors  better@hubbardinsurance.com

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Directors and Officers are responsible and accountable to the organizations they oversee. Their actions are very important and must be in good faith and of the best interest of the organization. If you play a role on a Board of Directors you know the expectations placed on them for both large and small organizations, “for profit” and “non-profit” organizations, are under the spotlight and therefore it is important to take measures to protect yourself and your reputations from allegations of negligent acts. You do have a personal liability exposure that can be quite severe if not protected.

We are frequently asked to give examples of past and/or potential claims scenarios to illustrate the potential risk. The following scenarios are not meant to intimidate you, but to illustrate the exposure that is present, even more so in this day and age.

Insurance Industry Coverage to Consider

COMMERCIAL PROPERTY INSURANCE

Protect your physical assets such as your building, stock, and equipment against loss.

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NOT-FOR-PROFIT INSURANCE

Serving communities, raising awareness, fundraising, engaging volunteers provides meaningful services with its own insurance needs.

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GROUP BENEFITS & LIFE INSURANCE

Coverage for health care, dental care, short term or long term disability, life insurance for any size businesses operation.

Learn more