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Do You Have Management Liability Insurance?

Do You Have Management Liability Insurance?

Hayes Brokers believes that regular insurance portfolio reviews are important for businesses. Besides cyber liability insurance, the most often unpurchased coverage for business owners is Management Liability insurance. If you don’t currently have these policies or have never been offered this coverage in the past, it is time to talk to your broker. So what is Management Liability insurance? The Components of Management Liability Insurance Management Liability coverage is actually a combination of coverage lines or policies designed to protect business owners, management teams and boards of directors. These entities can be vulnerable to claims no matter how large or small the company is, and whether or not it is private, non-profit or publicly held. These policies typically include: Directors & Officers Liability (D&O). Whether or not you have an official board of directors, there are one or more persons who make decisions for your company. Directors and officers may be exposed to costly litigation brought against them and the company due to financial losses brought on by the decisions of this board or the individuals. This coverage not only protects the assets of the company, but also the personal assets of the directors and officers. Examples of D&O claims include conflict of interest, violation of articles of incorporation and/or bylaws of the organization, transactions with companies in which the directors or officers have a personal interest or any other dealings that cause financial losses to the company or shareholders. Employment Practices Liability (EPLI). EPLI is valuable coverage that provides for defense costs and damages resulting from alleged or actual employment-related practices for things such as wrongful termination, failure...
Directors and Officers Professional Liability is Changing

Directors and Officers Professional Liability is Changing

Ah, 2008. The year the housing bubble burst and took everyone from you and your next door neighbor, to the banks, investors and insurance companies down with it.  Unsinkable businesses faltered. Some even failed. Eight years later the world is still in recovery.  As the details continue to shake out, the insurance industry is just beginning to make the necessary changes to properly safeguard against the next financial crisis. One area where drastic changes are being made is Directors & Officers (D&O) professional liability, particularly for financial organizations.  D&O insurers continue to get hit hard by the fallout from decisions made by their insureds that contributed to the latest recession.  Here is what happened, and what you can expect to see, if you haven’t already. What Really Happened? The real estate market was known for decades as a rock-solid investment.  If you have ever purchased a home then you know how rigorous the process is: credit check, income validation, maybe even the promise of your firstborn child if you don’t pay back the loan. People didn’t buy homes unless they could qualify and pay the mortgage, and people always paid their mortgages. Bundling mortgages into mortgage bonds created an investment vehicle that would guarantee returns. Investors couldn’t lose if they bet on the housing market. As time went by, the market got bigger: a strong economy meant more houses being built. Inventory was high, interest rates were low, and truly qualified buyers were hard to come by.  Banks and mortgage brokers had to figure out a way to sell the houses that were being built, so they lowered their...