Zurich launches new D&O product | Insurance business America
The product protects non-US directors and officers of US-based multinational companies
Occupational risks
By Ryan Smith
Zurich American Insurance Company, part of Zurich North America, has announced the addition of a standalone Side-A directors and officers insurance option for U.S.-based multinational corporations with non-U.S. directors and officers.
The new policy, called “International Towers,” from Zurich Executive Universal Select helps protect the personal financial assets of non-U.S. directors and officers when they face a management liability lawsuit and their company incurs legal fees under local laws , court orders etc. cannot cover other reasons. These are called unrecoverable losses.
The new guidance also helps address an ongoing litigation trend impacting multinational corporations: the increasing severity of D&O lawsuits and losses in the United States.
Over the past decade, it has become increasingly common for directors and officers to be named in filings and lawsuits alleging wrongful acts in their executive capacity, Zurich said.
In traditional international D&O programs, where the coverage limits of local policies in other countries are tied to the U.S. policy, a single U.S. case could exceed a company’s entire international program limit, leaving their non-U.S. directors and officers unprotected. If they are named in one, they will take legal action, Zurich said. The new Side-A offer protects against the risk of one’s own assets being put at risk.
The International Towers by Zurich Executive Universal Select policy includes:
- A master policy issued to the U.S. parent company that covers Side A D&O risk for non-U.S. directors and officers. Because only non-U.S.-based directors and officers are covered, the coverage limits protect against U.S. losses.
- Locally approved Side A policies issued by locally approved insurers to ensure that non-U.S. directors and officers have insurance coverage that complies with local regulations.
In some cases, without locally approved Side A protection, the personal assets of directors and officers may be at risk if they are named in a lawsuit related to their role.
Another differentiator of the new policy is that it can be purchased from Zurich without Zurich being the primary or lead Side-A carrier on the customer’s US D&O tower.
“With the increasing severity of securities class actions (SCA) in the U.S., the risk of a complete erosion of primary D&O limits is greater,” said Brian Zink, head of financial lines for U.S. national accounts at Zurich North America. “For this reason, the introduction of our own D&O limit outside the USA is becoming increasingly important for our customers.
“Individual directors and officers are most concerned about an uncompensable loss because their personal assets are at stake in these situations. That’s why we developed a solution to meet this growing need. Offering them this product addresses a burden that can keep them awake at night.”
“Zurich has been providing international solutions in the U.S. for nearly 50 years, and this new Side-A-only offering, in addition to our comprehensive D&O coverage from International Towers by Zurich, is the latest example of how we listen to our customers and Finding solutions to their changing needs,” said Andy Zoller, head of international programs at Zurich North America. “Providing this information to their foreign directors and executives can help these companies attract and retain top talent. It helps assure their non-U.S.-based directors and officers that they have the management liability insurance they need if or when they need it.”
In other company news, Zurich-based travel insurance company Cover-More Group has announced the appointment of Justin Sebire as interim CEO. Zurich North America recently announced key leadership changes in its direct market and crop insurance businesses.
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2024-02-02 10:24:25
www.insurancebusinessmag.com
