Entity Plus Coverage Introduction for Directors & Officers - - PowerPoint PPT Presentation

Entity Plus Coverage Introduction for Directors & Officers Liability – ABC Cover

• Current inquiry and investigation coverage – and our solution
• How the coverage works
• Examples of the co-insurance in practice
• Notification and policy periods
• Recap of what is in the endorsement
• Q&A

Agenda

All examples here are merely illustrative and coverage would be subject to full terms and conditions

Current investigations coverage and our offering

Covered claims against D&Os Indemnification? Covered claims against Entity No D&Os Personal assets YES YES Yes Corporate Entity Corporate assets WHO? WHAT? INQUIRY? INVESTIGATION Entity as a defendant in SCA

• nly

Corporate assets No No

SIDE A SIDE B SIDE C SIDE “C+ ”

Entity for SCA and investigations – trigger of SCA being filed Corporate assets YES YES YES YES

All examples here are merely illustrative and coverage would be subject to full terms and conditions

Entity investigation costs: how the coverage works

Look back and look forward coverage

SCA filed

Entity inquiry and investigation (formal and informal) look back coverage costs co-insurance

SCA resolved

Entity inquiry and investigation (formal and informal) look forward coverage co-insurance No co-insurance applies for costs incurred after filing of SCA until SCA is resolved

All examples here are merely illustrative and coverage would be subject to full terms and conditions

5m entity inquiry and investigation costs pre SCA 5m entity inquiry & investigation costs incurred alongside SCA 5m SCA settlement and defence costs 5m entity inquiry & investigation costs incurred after SCA resolved Liability retained by the entity

Co-insurance and payment example (current)

Liability retained by entity Policy limit paid: $4m Policy limit available for a subsequent claim ($16m) Amount paid by the client ($16m) Liability retained by the entity SCA settlement and defence of $4m

(or allocation depending on facts of the case

All examples here are merely illustrative and coverage would be subject to full terms and conditions

$1m retention

$1m retention WE PAY: 75% coinsurance ($3m) WE PAY: $5m for concurrent entity costs WE PAY: SCA settlement

• f $5m

(subject to allocation) WE PAY: 75% coinsurance for costs incurred post SCA resolved ($3.75m) 25% retained by entity ($1.25m) Policy limit paid: $16.75m Policy limit remaining Amount retained by client: $3.25m

Co-insurance and payment example (with “C+” coverage)

25% retained by company ($1m)

All examples here are merely illustrative and coverage would be subject to full terms and conditions

5m entity inquiry and investigation costs pre SCA 5m entity inquiry & investigation costs incurred alongside SCA 5m SCA settlement and defence costs 5m entity inquiry & investigation costs incurred after SCA resolved

Further co-insurance examples - $15m policy with $1m SIR

All examples here are merely illustrative and coverage would be subject to full terms and conditions Scenario 1: Dismissal: Significant entity inquiry and informal & formal investigation costs incurred prior to SCA filing ($10m). SCA dismissed prior to motion to dismiss with defence costs of $1m

Client pays all $11m we pay 75% of $9m ($6.75 m $1m SIR Client retains 25% of $9m We pay SCA defence costs

• f $1m

Old structure With C+ coverage

Scenario 2: Large SCA settlement: Significant entity inquiry and informal & formal investigation costs incurred prior to SCA filing ($20m). SCA defence costs

• f $30m, and settlement of $100m

Client pays pre SCA costs

• f $20m

$1m SIR Excess tower pays remaining $115m loss We pay $15m policy limit in defence costs $1m SIR We pay 75% of $19m ($14.25m) Excess tower pays remaining $129.25m loss Client retains $4.75m We pay $0.75m

• f SCA

costs Old structure With C+ coverage

Notification: how this works.

Policy period where investigation is notified to insurers

2016 2017 2018 Entity endorsement first granted with coverage date of 2016 Entity investigation is commenced against company but not noticed to insurers (optional reporting) Entity investigation is noticed and accepted by insurers as a circumstance SCA filed. Claim sits in 2017 YOA for both Investigation costs and SCA NOTE: if investigation had been noticed to insurers at the point it was received in 2016, all coverage would sit in the 2016 policy

All examples here are merely illustrative and coverage would be subject to full terms and conditions

Notification: how this works (cont/d)

Policy period where investigation is not notified to insurers

2016 2017 2018 Entity endorsement first granted with coverage date of 2016 Entity investigation is commenced against company but not noticed to insurers SCA filed. Claim sits in 2018 YOA for both investigation and SCA

All examples here are merely illustrative and coverage would be subject to full terms and conditions

• Costs, Charges and Expenses from an I nvestigation of the

Com pany

• I nquiry Costs from an I nquiry of the Com pany
• Costs, Charges and Expenses as a nom inal defendant in a

Derivative Suit

• Plaintiff Fees in a Derivative Suit
• Books and records cover, w ith a sub-lim it
• Explicit coverage for class certification fees
• I nquiry cover for insured persons including ( i) requests by

court appointed trustees and liquidators and ( ii) third party litigation against the com pany ( in relation to non- indem ifiable loss) and ( iii) internal investigations ( also in relation to non-indem ifiable loss)

• I nquiry cover includes sw orn testim onies

The detail…

All examples here are merely illustrative and coverage would be subject to full terms and conditions

Entity Coverage Endorsement