Independent Directors Liability Insurance

Independent Directors Liability insurance is a specialized form of D&O coverage that provides liability protection for directors even when the limits of standard D&O coverage are exhausted.
The practice of insurance regulatory law is not only about compliance with the various state and federal laws and regulations that impact the insurance industry, its also about protecting your clients and their businesses.

To that end, Elizabeth Judd at Corporate Secretary has an interesting article entitled Do Directors Need Separate Liability Coverage?

IDL coverage limits are not sapped by corporate liabilities, and thus IDL is an option when all other sources of funding are depleted.
As her article details, Independent Directors Liability insurance (“IDL”) provides liability protection for directors outside the limits of the standard directors and officers (“D&O”) insurance coverage that most companies obtain. IDL is a specialized form of D&O coverage that protects only the directors, and it pays out even if the company’s D&O coverage is exhausted.

Scott Godes, counsel at Dickstein Shapiro and author of the Corporate Insurance Blog, is quoted in the article as noting that, while insurance firms have 'remarkably creative lawyers who can find ways to deny coverage or rescind the policy' when D&O claims get messy, these IDL policies are typically being marketed as nonrescindable, which could be a good sign for insured directors.

IDL coverage is an option when all other sources of insurance and funding are unavailable or depleted. IDL coverage does not cover the acts or omissions of the entity or the wrongful acts of the insiders; thus, IDL limits are not sapped by corporate liabilities, according to Godes.

For more of Scott Godes' comments about IDL, check out his Corporate Insurance Blog.

And read the full article from Elizabeth Judd:

1 comment:

  1. This blog is good and nice .it is very helpful and give me more knowledge ..thank you

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