Market tolerance for Directors and Officers Insurance (D&O) is in flux. Both public and private organizations carrying directors & officers insurance should be prepared for potential changes in both coverage and premium.
According to this article from the Insurance Journal (Directors and Officers Insurance Renewal ) carriers will be taking a long hard look at your organization’s financial performance in determining premium and coverages offered. Be prepared for underwriters to ask more questions in quantity and expect those questions to be more detailed in regards to financial structure, performance, and future. Additionally underwriters will be making more document requests and possibly requiring client meetings.
Directors and Officers Insurance Premiums Could Go Up
If your company has large amounts of debt or struggles to pay debt on time, your premiums are going up.
Plain and simple.
You can bet on it like death and taxes (and the Bills not making the playoffs)…
Other factors that will be scrutinized in coming directors and officers insurance renewals include:
- Claims History
- Declining Revenue
- Relationship with Bank
- Industry Impact of Market Downturn
- Layoffs
- Employer Stock in Retirement Plan
These are just a few (see the Insurance Journal article above for more).
So What Do You Do?
Be prepared! Let me say that again, BE PREPARED!
Don’t meet with your independent insurance agent two weeks before your renewal and expect everything to be business as usual.
- Contact your independent insurance agent two months before renewal (He or she should be contacting you, but that is a different article),
- Have documentation surrounding issues ready,
- Have a detailed plan for addressing issues including explanations and solutions,
- Build a relationship with the underwriter which will help them feel comfortable with your business.
Directors and Officers insurance is a very serious coverage because it protects the individuals responsible for guiding an organization. Most directors & officers insurance claims arise from situations board members were unaware of.
Inadequate protection can be crippling to any organization.
If you would like to discuss your directors and officers insurance and your options for keeping premiums low while still properly protecting your organization give us a call at (518) 456-6688 or Click Here to start the process by email.