The Association is pleased to offer its members the opportunity to take part in our Errors and Omissions (E&O) program delivered through a partnership with Westport Insurance Corporation (Swiss Re).
This service is exclusive to members and has been in place for many years. Benefits to choosing our program include:
- broad protection and coverage at competitive rates;
- commissions earned are used to support the work of the Association;
- a 10% credit towards your annual premium for participation in the annual loss control session/webinar
Member brokerages taking part in IBANS professional liability program are also eligible for .
This D&O coverage complements our existing E&O coverage with premiums beginning at $1,200 for $1 million of indemnity coverage, with a separate $1 million dedicated limit for defense expenses. The maximum indemnity limit offered is $5 million and the expense limit maximum is set at $2 million.
WHY IS D&O COVERAGE SO IMPORTANT?
- Personal wealth protection: Directors and officers can be held personally liable for claims and, therefore, risk their individual financial security. D&O insurance can protect the personal assets of directors and officers, their spouses, and estates. A brokerages assets are also closely tied to the personal wealth of management, making protection for claims brought against the entity extremely vital.
- Indemnification supplement: A brokerage’s bylaws may state that the corporation shall indemnify its directors and officers, but that does not guarantee the brokerage will have the resources to do so. Further, the brokerage may not legally be able to indemnify directors and officers even if the resources are available. When a company cannot indemnify its directors and officers, D&O insurance can step in instead.
- Balance sheet protection: Allegations against directors and officers can be costly, even when they are frivolous, unfounded, or lack merit. Complex claims, such as shareholder suits, anti-trust allegations, and merger objection claims can generate sky-high defense and settlement costs that could have a negative impact on the brokerage’s financial profile and viability to continue as a going concern. A D&O policy can absorb these types of costs.
- Vast potential claimant pool: Directors and officers can be sued by shareholders, competitors, creditors, customers, and employees. Moreover, claimants can include federal and provincial agencies who can initiate investigations that have the potential to generate a host of issues, ranging from large defense costs to unflattering publicity and negative effects on a brokerage’s brand.
- Bankruptcy and insolvency protection: During an economic or industry down cycle, there is potential for bankruptcy resulting in creditor suits and bankruptcy trustee claims against board members. Claimants can seek restitution at the expense of the individual director or officer. When a company is insolvent and can’t indemnify the board, a D&O insurance policy is the last line of defense for directors and officers.
- Affordability: D&O is very affordable insurance when compared to defending litigation costs and paying a settlement.
To obtain a quote, or to learn more about our E&O program contact Debbie Paul, .