Management Liability: For reference to this section, see Glossary.
(Y)es or (N)o
1. I am a director or officer or manager of a corporation. Directors and Officers
2. I am responsible for employee assets in an employee benefit plan. Employee Benefit Liability
3. My company could be found liable for employment discrimination, wrongful termination, or sexual harassment practices. Employee Practices Liability
4. My company is subject to ERISA requirements. ERISA Liability
5. I am a trustee or oversee a pension or benefit plan. Fiduciary Liability
6. I am potentially exposed to kidnapping or extortion by others. Kidnapping
7. I am on the board of a not-for-profit organization. Not-for-Profit Director
Directors and Officers
In today's legal environment, lawsuits against directors and officers of a corporation are commonplace. The possible exposure to substantial personal liability under federal and state law is of grave concern to board members and management.
Many talented individuals are reluctant to serve on the boards of corporations without having assurance that they themselves are adequately protected from personal liability. This is especially true for companies that engage in merger, acquisition or divestiture activity or suffer after-tax losses.
Securities related shareholder lawsuits against board members are on the rise, accounting for nearly half of all D&O claims. In these lawsuits, shareholders assert those board members or corporate officers mislead them when disclosing information to the public about the company's future. These lawsuits, disruptive and costly for corporations of all sizes can destroy smaller companies that do not have the resources to fight.
According to the most recent Wyatt survey, the average defense cost on all closed claims was about $967,000 and the average paid to the claimant was approximately $4.62 million. With the ever present risk of litigation looming over boards of directors, and claim severity increasing, companies of all sizes are doing what they can to prepare for the worst.
Directors and Officers Liability Insurance is designed to provide protection against personal liability exposures faced by board members and management.
Employee Benefits Liability
covers past, present and future directors, officers, partners, and employees, as well as the sponsor organization and the plans for actual or alleged wrongful acts. "Wrongful act" includes a violation of any responsibility, obligation or duty under ERISA or similar common or statutory law of the US, Canada or any other jurisdiction anywhere in the world. The policy provides payment for defense costs, settlements and judgments for damages for which an insured is legally liable. The policy provides coverage for administrative errors and omission claims. Potential claimants include plan participants, the Department of Labor and other federal agencies.
Employee Practices Liability
provide coverage to the entity, the directors and officers of the entity, and the individual employees from claims brought by past employees, present employees or prospective employees who assert employment discrimination, wrongful termination, or sexual harassment. All terms are defined broadly within the policy form. Discrimination is broadly defined to include protected classifications established pursuant to local, state and federal law. Wrongful termination coverage is extended to encompass termination determined to be against the law or wrongful. Sexual harassment includes both hostile environments and "quid pro quo" harassment.
Downsizing, managed care, reengineering, or early retirement--many initiatives meant to bolster corporate balance sheets can create an ERISA liability claim. These are claims asserting breaches of fiduciary obligations as set forth in the ERISA of 1974. Our carriers offer the most extensive and flexible coverage available, responding to ERISA-related liability with protection for fiduciary risks.
Any trustee or employee who oversees the pension or welfare benefit plans of a union organization, a business association, a governmental agency, or religious or civic organization who exercises discretionary control over the assets of such benefit plans, is considered a Fiduciary, and is therefore subject to claims of misconduct or abuse under the Employee Retirement Income Security Act of 1974 (ERISA). The Multi employer Pension Trust Liability policy provides payment of defense costs, settlements and judgments for damages for which an insured, defined as a trustee or employee who acts as a fiduciary (as defined in ERISA) of listed plans, trusts, is legally liable, arising out of actual or alleged breach of fiduciary duty under ERISA or similar common or statutory law. Such breach of fiduciary duty includes, but is not limited to, any negligent act, error or omission in the administration of any listed Plan or Trust.
Kidnap and Extortion
covers kidnapping or asserted kidnapping, personal extortion, property extortion, wrongful detention, and hijacking.
Not-for-profit director liability
covers partners, employed attorneys and "of counsel" in their capacities as directors of an outside not-for-profit board.
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