Global D&O Protection Gap

Worldwide U.S. directors and officers (D&O) policies do not provide the global protection that many insureds may believe they have. That’s the upshot of  the latest annual D&O  liability survey by Towers Perrin. It found that only 3 percent of survey participants with international operations have  purchased separate local D&O liability insurance policies for individual countries. This is despite the fact that many countries do not permit non-admitted D&O insurance policies to cover local directors and officers. Towers Perrin warns that many companies are not yet aware of this emerging issue. Given the  increased claim activity outside the United States, this issue is unlikely to go away. By the way, some 43 percent of survey participants indicated that their firms are global. Something to think about.

2 thoughts on “Global D&O Protection Gap”

  1. The same could be said regarding other lines of business. For example, carriers will often endorse an ISO CGL policy with a “worldwide coverage territory” or “International coverage territory” endorsement. This structure may be intended by the carrier to function as a foreign excess difference in limits and difference in conditions policy (that sits excess the greater of the locally placed admitted cover or a self insured retention.).

    In many countries this type of policy structure may not recognized / considered as satisfying that country’s statutory requirement for insurance to be placed with a locally recognized admitted insurer. Consequently, an insured may find themselves not in compliance with local statutory requirements.

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