Product protects non-US board members and officers of US-based multinational companies
The new policy, called International Towers by Zurich Executive Universal Select, helps protect the personal financial assets of non-US directors and officers if they are faced with a management liability lawsuit and their company cannot cover legal costs because of local law, court orders or other reasons. These are known as non-indemnifiable losses.
The new policy also helps address an ongoing litigation trend impacting multinational companies: the increasing severity of D&O lawsuits and losses in the US.
Over the past decade, it has become increasingly common for directors and officers to be named in filings and lawsuits alleging wrongful acts in their capacity as leaders, Zurich said.
With traditional international D&O programs in which local policies in other countries have their coverage limits tied to the US policy, a single US case could exceed a company’s total international program limit, leaving their non-US directors and officers unprotected if they are named in a legal action, Zurich said. The new Side A offering protects against the risk of their personal assets being put at risk.
The International Towers by Zurich Executive Universal Select policy includes:
- A master policy issued to the US parent that covers Side A D&O risk for non-US directors and officers. By covering only non-US directors and officers, the policy limits are shielded from US losses.
- Locally admitted Side A policies issued by locally licensed insurers, to ensure that non-US directors and officers have coverage that complies with local regulation.
In some cases, without locally admitted Side A coverage, the personal assets of directors and officers can be at risk if they are named in a lawsuit in connection with their roles.
Another differentiator for the new policy is that it can be purchased from Zurich without Zurich being the primary or lead Side A carrier on the customer’s US D&O tower.
“With the increasing severity of securities class action (SCA) claims in the US, primary D&O limits are more susceptible to being fully eroded,” said Brian Zink, head of financial lines for US national accounts at Zurich North America. “Having a dedicated non-US D&O limit is gaining importance among our customers for this reason.
“Individual directors and officers are most concerned about non-indemnifiable loss, as their personal assets are on the line in these situations, so we designed a solution to meet this growing need. Bringing this product to them addresses an exposure that can keep them up at night.”
“Zurich has provided international solutions for almost 50 years in the US, and this new Side A-only offering, in addition to our full coverage D&O from International Towers by Zurich, is the latest example of how we listen to our customers and solve for their evolving needs,” said Andy Zoller, head of international programs at Zurich North America. “Providing it to their overseas directors and officers can help these businesses attract and retain top talent. It helps assure their non-US directors and officers that they’ll have the management liability coverage they need, if or when they need it.”
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