Organizations are at constant risk of lawsuits and third-party claims if their key personnel commit any mistakes that cause a financial loss to third parties. Though the D&O of the organization make decisions for the growth and development of the organization, they might make mistakes that might incur lawsuits and hefty settlements. The company suffers the financial consequences of the mistakes of its directors and so, a director’s insurance policy proves to be a useful coverage.
The D&O liability insurance covers the settlements to be paid by the organization along with any defense costs incurred. The policy comes with three basic coverage benefits which are as follows –
- Side A cover, wherein the directors and officers are covered for the cost of lawsuits if the organization becomes insolvent or files for bankruptcy. Thus, when the organization cannot pay for the director’s liability claims, the policy steps in to do the same.
- Side B cover, wherein the policy reimburses the third-party settlements which the organization pays for its directors and officers.
- Side C cover, wherein the policy covers the organization itself against securities claims.
These three benefits are usually inbuilt into D&O liability insurance coverage. Moreover, policy extensions, called add-ons can extend the scope of coverage of the policy. These can become a part of the policy at additional premiums.
Additional Read: What is the D&O policy cost?
Can I include the add-on coverage after buying D&O insurance?
D&O insurance policy add-ons include –
- Coverage for the cost of public relations
- Employment practices cover, also known as entity EPLI cover
- Worldwide coverage
- Coverage for retired directors and officers
- Coverage for new subsidiaries of the organization
- Legal representation extension
- Entity security extension
- Joint Property Liability
- Cover for the legal heirs and spouse of insured employees against possible liabilities
- Special excess protection for non-executive directors
- Outside directorship cover
- Emergency defense costs
- Bilateral discovery period extension, etc.
You can choose to add one or more of the available add-ons while buying the director’s insurance policy. D&O (Directors and Officers) insurance add-ons can significantly enhance the coverage of the policy. These add-ons may include coverage for employment practices liability, fiduciary liability, cyber liability, or entity coverage, providing comprehensive protection for directors and officers against a wide range of risks and potential lawsuits, thus extending the policy’s scope.
However, once you have bought the policy, the addition of extensions during the coverage duration is not possible. If you want to add the extensions after buying the D&O liability insurance coverage, you can do so at the time of renewal.
Coverage additions at the time of renewal
When you are renewing your policy, the insurance company allows you to change the coverage details. You can change the sum insured, policy extensions, and also add-ons. You can add or remove add-ons at the time of renewal. The renewal premium increases when you add an extension and the premium reduces when you remove any add-on.
Thus, to opt for add-ons after buying a D&O insurance policy, you would have to wait for renewal. At the time of renewal, you can add the required extensions and customize your policy.
SecureNow for your insurance needs
If you are looking for the best coverage for your D&O liability insurance coverage, you can take help from SecureNow. SecureNow would give you options for different D&O insurance plans which you can compare on the basis of the available extensions. You can then make your choice. You can take SecureNow’s help to find the most suitable add-ons for your D&O policy while renewing the same.
So, choose the relevant add-ons either while buying the policy or while renewing it and enjoy a comprehensive scope of coverage.
About The Author
Rajesh
MBA Finance
With a wealth of expertise in the insurance realm, Rajesh is a distinguished writer specializing in articles focusing on directors and officers insurance for SecureNow. Boasting 9 years of experience in the industry, he profoundly understands the complexities surrounding directors and officers liability coverage. Their articles delve into the intricacies of D&O insurance, providing readers with invaluable insights into risk mitigation strategies and policy considerations. Renowned for their comprehensive knowledge and attention to detail, Rajesh is dedicated to delivering informative and engaging content that empowers individuals and businesses to navigate the complexities of insurance with confidence.
