This document provides an overview of directors and officers (D&O) liability insurance. It discusses the history, coverages, and limitations of D&O insurance. D&O insurance protects executives and managers from losses and risks associated with their decisions by providing personal financial protection. It was first established in the 1930s in the US and developed further in the 1980s. Coverages include losses from actions taken by management, governing bodies, and executives, as long as there was no intentional wrongdoing, negligence, or prior knowledge of issues. Limitations include requiring claimants to prove fault and not covering full payouts if executives own company stock.

1. D&O Insurance
June 5th 2013
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2. Curriculum
• General Information
• History
• Coverages
• Limitation
• Vendors
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3. General Information
• Directors and officers liability insurance
• insurance to manager and executive persons of of
the company
• Focus on those people and not the company itself
• Covers losses and high risk decisions of executive
employee
• “Personal financial protection”
• Motivates employees to take higher positions in the
company
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4. History
• Developed by Lloyd„s of London
• Established in USA in 1930„s
• In the 1980„s there was a „D&O-crisis“
• Many companies took the chance to procure the insurance
• As a result they added a number of clauses in the policy
 the „D&O-market“ was born
• There is no standard D&O-form
• They used in a similar way (shared outline)
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5. Coverages
• Insurance covers multiple organs:
• Management of the company
• Governing body
• General managers
• Executive positions
• Insurance comes in to action, if…
• … there is no bad intention
• … there is no loose of duty to take care of thirds (customers,
vendors, own company/employees)
• … the insured person is not in knowledge of a fault in the past
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6. Insurance protects you from both sides…
Inside the company
Outside the company
executive
organs
customers
employees
vendors
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7. Limitation
• In case of a accusation you have to keep in mind the
following things:
• The claimant is the person who has to proof YOUR fault
• You are not guilty until someone is able to proof a possible mistake
• If you own stock options from the company you are work for, the
insurance will not cover the full amount which is involved in the
case
• Usually there is a compromise between the two parties
• The insurance will not cover any costs if you did something with a
bad faith
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8. • Chartis
• Chubb Corp.
• The Travekers Companies
• ACE Limited
• XL Group
• Zurich Financial Services
• Allianz
• HCC Insurance Holdings
• The Hartford
• CNA Financial Group
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