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In the context of an increasingly challenging Directors and Officers (“D&O”) liability insurance market, we are being asked by clients for other options to placing the whole of their D&O programme with traditional insurers. One such option which is often raised is whether some or all of a D&O programme could be satisfied by use of a captive insurance arrangement.
Sides A, B & C
Traditionally, D&O liability is written on the basis of three types of cover:
Side A – cover for liabilities incurred by an individual in their capacity as a director or officer.
Side B – cover for corporate reimbursement of liabilities to a director or officer by the company for which they serve as a director or officer.
Side C – cover for securities claims against the company.
The use of a captive for Sides B & C is well aligned to captive participation with sufficient prudent consideration to risk appetite and loss control and can readily be accomplished. Side A, however, has a number of complications that are considered within this document.
For further information contact:
Angus Duncan
Executive Director – Coverage Specialist, Global FINEX
Direct: +44 20 3124 8386
E: Angus.Duncan@WillisTowersWatson.com
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