Directors and officers (D&O) insurance is a type of liability insurance that covers directors and officers for legal cases made against them. The policy covers the errors and omissions resulting from managerial decisions that can have adverse financial consequences. It also provides coverage for the legal fees and other costs the organization may have to incur in case of a lawsuit.
Below are the steps for filing a D&O insurance claim:
Approach your insurer
Your insurer or insurance broker is the primary contact when it comes to filing a claim under your D&O insurance policy. They should be aware of your situation and how to proceed further. You need to give your insurer/broker a detailed explanation of the incident and any photos or videos that can help in explaining the circumstances. A surveyor will then follow up with you to continue the claims process.
After you report the claim, it will need to be investigated by a surveyor to determine the amount of loss or damages covered by your Directors and officers liability insurance policy. The adjuster will also classify any liable parties, and you can help the process by providing any witness information or other parties’ contact information.
Once the investigation is over, the surveyor will go through your D&O insurance policy in detail to determine the inclusions and exclusions under your plan. He will then inform you of any applicable deductibles that may apply to your case.
Claim Form and Documents Submission
You will need to submit a claim form with the required documents to file the claim within a specific period. Make sure you provide a detailed description of your application to help them understand it better. It would be best if you connect with the insurer or broker to review your situation personally. They can help to confirm your conclusions or point out things you may not have noticed.
Sometimes people forget to disclose the exact details of the incident which led to the D&O insurance claim. One of the most important things to ensure your claims get settled in time is to make sure you provide the right information in your claim form. Non-disclosure of any information regarding the claim may lead to rejection. It is also crucial to renew your insurance on time to avoid problems during claim settlement.
Most claims under D&O insurance are paid on a reimbursement basis. In case of any claim, you will first have to spend the amount upfront, be it for the lawyer fees or other costs. The insurance company will then later reimburse the same to you. Directors and Officers insurance is your best bet to avoid significant financial losses. Also, this policy offers worldwide coverage if your firm has operations abroad. Choosing such a plan can help cover the claims arising from shareholders based overseas or international suppliers and clients.