Directors and Officers Liability Insurance

By Max Ali

Directors and Officers Liability Insurance (often called D&O ) is liability insurance payable to the directors and officers of a company, or to the organization(s) itself. Most D&O policies will cover damages or defense costs in the event they suffer such losses as a result of a lawsuit for alleged wrongful acts while acting in their capacity as directors and officers for the organization. Such coverage can extend to defense costs arising out of regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously. It has become closely associated with broader management liability insurance, which covers liabilities of the corporation as well as the personal liabilities for the directors and officers of the corporation.
Directors and Officers (D&O) liability insurance is purchased by companies to shield the personal assets of the Directors and Officers against claims from:
Competitors
Shareholders
Current or ex-employees
Corporate fraud
Statutory suits
The corporate landscape in Canada has often been characterized as one dominated by small and medium enterprises (SEM). According to Statistics Canada, there are 2.3 million SME's in Canada who employ 2/3 Canadians and account for about 60% all new jobs created in the private sector. It is clear that SME'S are a vital part of Canada's economy yet a majority are without any form of management protection otherwise know as Directors and Officers insurance. In a survey released in September 2008 by Chubb Insurance, 63% of private companies did not have any type of Directors and Officers Liability. The survey went on to breakdown what types of lawsuits these companies faced.
29% from employees
5% from competitors
6% from vendors
16% from clients
44% from shareholders.
The average cost to Canadian companies was $ 338,699 taking into account judgements, settlements, fines and legal fees. In Ontario, bill 189 has made it easier for shareholders to sue companies along with their Directors and Officers.
Charities and Non Profit Organizations (NPO's) are also a relatively untapped market in Canada when it comes to Directors and officers Insurance. There are more than 160,000 NPO's in Canada. As important as charities are, recent scandals have tarnished their image and opened the door to increased litigation against the Board of Directors. Charities and their Boards are now regularly being held accountable for:
Misuse of funds
Conduct of fundraising activities
Wrongful dismissal
Sexual harassment
Insolvency
In today's economic climate, NPO's are faced with diminishing levels of financial support, stricter rules and regulations and an increasingly savvy public making sure their donations are used to the maximum and best use. As corporate D/O has reached its saturation point, insurers are looking at targeting NPO's and SEM's. Simpler applications, lower premiums and packaged policies are now surfacing throughout Canada.
New markets entering this class of business are willing to reduce rates substantially to secure accounts with Canada's leading businesses and organizations. The D/O product is an excellent coverage to help fill the needs of these organizations and also presents an excellent opportunity to build closer relationships with business owners, CEO's & CFO's.
Market segmentation and the growth of niche insurers looks to continue upward as standard carriers continue to decline in numbers, tightening their focus on personal lines. Niche opportunities exist in both personal and commercial lines. Aligning with flexible niche insurers, brokers and MGA's can offer a wide range and various combinations of services, and continue to create successful programs.

Considering Student Insurance

By Dylan S. Barrett

Student insurance is a must for any child that is studying either in their home country or abroad. A price cannot be put on your child's safety and health. If you haven't already thought about student insurance, it's time to at least learn some details about a policy.
Traditionally, families will carry their children on their insurance policy that is provided by their employer. While this is a significant way to keep the family healthy, it may not provide adequate coverage for your student children.
If your student is attending an out-of-state or out- of- country school, a student insurance policy is warranted. Your current insurance policy may consider the health care providers in other geographical areas as "out of network". This will ultimately increase your out-of-pocket costs and can even raise your premiums.
Some health insurance plans will "drop" the children when they reach the age of 18, 19, and 20, 21 or even higher, the age varies by state and plan. Be aware of the policies stipulation for age limits and keep in mind that you may need to purchase a student insurance policy.
Often times, student insurance is less expensive than traditional health insurance policies-some reasons for the price differences are:

• Often student health clinics procure prodigious discounts when services are utilized on campus. Due to the campus service, student insurance plans don't need to be as comprehensive as traditional plans, therefore be less expensive.
• When students complete their education, they are no longer eligible for student insurance, resulting in a short period of time that the insurance will be effective. The insurance companies that supply the policy are aware that the chances of the student implementing and utilizing their student insurance policy will be low. This ultimately ends up lowering the price of the policy premiums when compared to traditional health insurance policies.
• Traditionally, college students are younger and typically healthier than the general population, resulting in reduced risk for the insurer. Student insurance rates typically reflect that reduced risk.

Once you decide to attain a insurance quote, remember to ask a few questions, such as:

• What is the maximum amount of coverage supplied to me?
• What will my deductible be?
• Will the cost of my premiums change throughout the year?
• What items are not covered on this plan? For example, some carriers won't cover academic or recreational sports accidents and injuries.
• Will I have a list of physicians that I can choose from or can I see any physician?
• Do I need a referral to see a specialist?
• What are my options if I fall ill or injured while traveling?
• Will I ever need a pre-approval from the carrier before obtaining any format of health care?
• What happens if I decide to go to graduate school?
• What types of visits does my policy cover, sick visits or healthy visits?

Student insurance is definitely important to research and consider if your children are in school. Accidents and illnesses happen and once they have occurred, we cannot change the outcome-best to have the coverage available to receive premium health care for your family.