Should I select a D&O insurer offering lower premium?
A directors and officers liability policy proves to be a valuable addition for an organisation as well as for its key managerial personnel. In case the company’s directors and officers commit an error and omission, third party liabilities are likely to arise. These liabilities are covered by a D&O insurance policy.
A company’s profitability faces adverse impact because of the financial consequences of its employees’ mistakes. Additionally, the finances of the directors and officers face threat if they have to suffer the liability themselves. That is why a D & O insurance policy proves to be the best solution for the organisation and its directors too.
Selecting the right D&O Policy
A directors and officers insurance plan is offered by multiple insurance companies. Each company follows its own pricing policy. So, the D&O quotes are not uniform. When buying this policy, you can compare the quotes of different insurers to choose the best plan. However, is the insurer offering the lowest premium the best choice?
Not always. While the premium plays an important part in the selection of the insurance company, it is not the only thing that you should consider. When comparing insurers, take the following into consideration –
- The coverage being offered
- The claim settlement ratio of the insurance company
- The claim process and turnaround time
- The policy extensions on offer
Choose the right insurance company after comparing these factors and the premium.
Do a holistic evaluation
The company that charges the lowest premium might not always be the best insurance company. It is because of one or more of the following reasons –
- The policy can compromise on the coverage offered and offer you restricted coverage benefits
- There might be coverage limitations on the coverage provided
- The policy might not have the required extensions that you need to ensure complete protection
If there is any compromise with the coverage, you would end up incurring considerable out-of-pocket expenses in case of a claim. In such cases, the purpose of the D&O insurance policy would be defeated. The money that you will pay during claims would far outweigh the money that you would have saved on the premium cost.
Once you have taken all these factors into consideration, you should compare the premium quotes, and then choose an insurer that offers all the above-mentioned benefits and charges a low premium. It is likely that the insurer you select may not be the absolute lowest in cost but even after factoring in the coverages the cost should be in the 4th quartile or lowest 25% of all the insures selected.
Additional Read: Who is the right insurer to buy D&O policy?
Should I select a D&O insurer offering lower premium? How SecureNow can help?
SecureNow helps you choose the best D&O insurer by allowing you to compare between the leading plans on the basis of their coverage, claim record extensions and premium rates. With SecureNow’s help, you can choose the most suitable directors and officers liability policy that offers an all-inclusive coverage at the best premium rates. You can also customise your policy based on your needs and at the time of claims, SecureNow would give you complete assistance to get your claims settled without hassles.
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