Assessing Your Business's Risks
The first step in customizing your D&O insurance policy is to assess your business's risks. Different businesses face different risks, and it's essential to tailor your coverage to suit your specific needs.
For example, if your business operates in a highly regulated industry, you may face a higher risk of regulatory investigations and lawsuits. Similarly, if your business has a history of shareholder disputes, you may want to consider additional coverage for these types of claims.
Working with Your Insurance Broker
Once you have assessed your business's risks, it's essential to discuss your findings with your insurance broker. Your broker can help you identify any additional coverage options that may be relevant to your business. He can help you choose the appropriate coverage limits and deductibles as well.
Consider Purchasing Add-ons
In addition to standard D&O coverage, there are also various endorsements available that can provide additional protection. Depending on the risks faced by your business, there may be add-ons that can provide additional coverage for specific types of claims.
For example, Employment Practices Liability Insurance (EPLI) can provide coverage for claims related to employment practices, such as discrimination, harassment and wrongful termination.
If your company acquires or creates a new subsidiary, this add-on provides coverage from the date of creation or acquisition. The coverage is subject to specified terms and conditions of the insurance company.
By considering the various add-ons available, you can provide additional protection for your business against the risks it faces.
Review and Finalize Your Policy
Once you have made any necessary adjustments to your policy, it's important to review the updated policy carefully. Ensure that it accurately reflects your coverage needs and that you understand the coverage limits and deductibles. Make sure to keep a copy of the policy in a secure location. Also, ensure that all relevant stakeholders are aware of the policy's terms and coverage limits.
Working with an experienced insurance broker can help you identify any coverage gaps. Additionally, considering the various endorsements available can provide additional protection for your business. Remember to review your policy regularly to ensure that it continues to accurately reflect your coverage needs.