Directors and Officers Liability Insurance

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How does renewal pricing work in D&O Insurance?

A directors and officers liability insurance policy provides financial protection to the key management personnel of an organization for any errors that they might make. Being human, the company’s managerial executives might make mistakes in discharging their duties correctly. These mistakes, though not deliberate in nature, might cause financial injury to any third party. If such an injury occurs, the directors and officers face severe financial consequences.

Even the organization itself becomes liable for a lawsuit and might be sued for its employee’s mistakes. That is why organizations insure themselves under a D & O liability insurance coverage to protect themselves from possible financial repercussions.

Additional Read: Why should an organisation buy D&O policy?

The D & O insurance policy provides coverage to the directors, officers and even the organization as a whole if third parties suffer financial damages and file a claim thereon. The policy is offered for a specific tenure, as chosen by the organization, and once the tenure is over, the policy is up for renewal to ensure continuous coverage.

Renewal pricing of D & O insurance

At the time of renewal, the premium of the D & O liability insurance coverage might change. Here are some reasons for the change in renewal premium –

  • New directors and officers might join the organization. When it happens, the organization can include them in the D & O liability insurance coverage as well. As the number of insured employees increases, the risk increases and so the premium of the policy is also increased.
  • If existing directors and officers leave the organization, the number of insured employees would reduce which would also reduce the risk under the policy. As such, the premium would reduce.
  • If the organisation opts for sum insured enhancement, the premium would also increase
  • If optional policy extensions are added to the coverage at the time of renewals, the renewal premium of the directors and officers liability insurance policy would be hiked
  • If there have been claims in the policy year, the insurance company might apply a claim-based loading. This loading would increase the premium amount. On the contrary, if the claim experience was favourable, the insurance company might offer a premium discount that would lower the renewal premium

Thus, the premium of a directors and officers liability insurance policy is not constant. It changes at the time of every renewal due to the reasons mentioned above. If you want to get the best renewal premium for the D & O insurance plan, you should compare the available plans and then renew.

How does renewal pricing work in D&O Insurance?

Additional Read: What is D&O insurance cost? 

Many insurance companies offer D & O coverage. When you compare the available plans, you can find a policy that offers you coverage at a lower premium. You can switch to another D&O insurance policy on renewals and save on the premium cost. 

So, when renewing the directors and officers liability insurance policy, understand how the renewal premium would be calculated. Compare the available plans and get the best deal on the coverage. To compare you can visit www.securenow.in or call us at 96966 83999. Our experts would help you pick the right D&O policy at the right premium when you are renewing.