In The Know: The Lowenstein Insurance Recovery Group’s Tip Of The Month

Lowenstein Sandler LLP
Contact

As corporate policyholders prepare for another round of directors’ and officers’ (D&O) insurance renewals in a COVID-19 environment, a hardened D&O market, and a difficult economic climate, here are five tips to consider:

  • Bankruptcy. Have a D&O policy that can provide protections if the company becomes insolvent or enters bankruptcy. To that end, ensure the policy does not have bankruptcy- or creditor-specific exclusions, can respond to creditor committee claims, and does not treat a bankruptcy as a change-in-control event.
  • Sticker Shock. The hardening D&O insurance market that began before the pandemic continues. Be prepared for increased premiums and retentions and reduced capacity. Consider having your broker market your company’s D&O program to compare terms.
  • Narrow Exclusions. Narrowing exclusions should be a goal during any renewal, but in a COVID-19 world, focus on narrowing the “bodily injury” and “pollution” exclusions to try to maximize coverage for any COVID-19-related claims.
  • Investigation Coverage. As the government conducts investigations into companies that secured PPP loans, CARES Act grants, or other government benefits, companies should ensure their D&O policies provide government/regulatory investigation coverage.
  • Notice of Circumstances. If the terms and conditions of the renewal D&O policy are more restrictive than the expiring policy, consider providing a notice under the expiring policy of any potential claims to lock in the more favorable coverage.

Written by:

Lowenstein Sandler LLP
Contact
more
less

Lowenstein Sandler LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.