When it comes to business insurance, directors and officers (D&O) liability coverage is essential. D&O coverage protects the personal assets of directors and officers in the event they are sued for actions taken in their capacity as company representatives. One important aspect of D&O coverage is Insuring Agreement C.
Insuring Agreement C provides coverage for claims against directors and officers for actual or alleged “wrongful acts.” Wrongful acts can include errors in judgment, breach of duty, and failure to disclose material information. Insuring Agreement C also covers claims arising from the failure to comply with laws and regulations, including those related to securities, antitrust, and environmental issues.
Insuring Agreement C is critical because it provides coverage for claims that may not be covered under other insuring agreements. For example, Insuring Agreement A provides coverage for claims arising from securities violations, while Insuring Agreement B provides coverage for claims arising from employment practices. Insuring Agreement C fills in any gaps in coverage, ensuring that directors and officers are protected from lawsuits related to a wide range of issues.
It`s important to note that Insuring Agreement C is subject to a “self-insured retention” (SIR), which is similar to a deductible. The SIR is the amount that must be paid by the insured before the insurance policy kicks in. The SIR for Insuring Agreement C is typically higher than the SIR for Insuring Agreements A and B because it covers a broader range of claims.
In addition to the SIR, there are other limitations and exclusions under Insuring Agreement C. For example, claims arising from intentional or criminal acts are typically excluded. Claims arising from acts that occurred before the policy period or after the policy period expires are also excluded.
In conclusion, Insuring Agreement C is a vital component of D&O liability coverage. It provides coverage for a wide range of claims that may not be covered under other insuring agreements, filling in any gaps in coverage. However, it`s important to be aware of the limitations and exclusions under Insuring Agreement C, including the SIR and exclusions for intentional or criminal acts. As always, it`s essential to consult with an experienced insurance professional to ensure that your D&O coverage meets your specific needs.