The product protects non-US board members and officers of US-based multinational companies
Occupational hazards (Insurance News)
Zurich American Insurance Company, part Zurich North America announced the addition of separate Side A directors and officers insurance for US-based multinational companies with non-US directors and officers.
The new policy, named International Towers by Zurich Executive Universal Select, is designed to safeguard the personal financial assets of directors who are not based in the United States and officers if they face a management liability lawsuit and their company cannot cover legal costs due to local laws, court orders, or other reasons. These losses are known as irrecoverable losses.
The new policy also helps address an ongoing litigation trend impacting multinationals: the increasing severity of D&O litigation and losses in the US.
In the past decade, it has become increasingly common for directors and officers to be named in filings and lawsuits for alleged wrongdoing in their leadership roles, Zurich said.
With traditional international D&O programs, in which local policies in other countries have coverage limits tied to the U.S. policy, a single U.S. case could exceed a company’s total international program limit, leaving its non-U.S. directors and officers unprotected if named in legal action, Zurich said. Side A’s new offer protects against the risk of endangering their personal property.
International Towers by Zurich Executive Universal Select policies include:
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- A master policy issued to a US parent company 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 protected against US losses.
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- Locally recognized Party A policies issued by locally licensed insurers to ensure that non-U.S. directors and officers have coverage that complies with local regulations.
In some cases, without locally admitted Party A coverage, the personal assets of directors and officers may be at risk if they are named in litigation in connection with their roles.
Another difference for the new policy is that it can be purchased in Zurich without Zurich being the primary or primary A-side carrier on the customer’s US D&O tower.
“With the increasing severity of securities class action (SCA) claims in the U.S., primary D&O limits are more susceptible to being completely breached,” said Brian Zink, Head of Financial Lines for U.S. National Accounts in Zurich North America. “For this reason, having a dedicated non-US D&O limit is becoming increasingly important for our customers.
“Individual directors and executives are most concerned about uncompensated losses as their personal assets are at risk in these situations, so we have designed a solution to meet this growing need. By bringing them this product, it’s the exposure that can keep them up at night.”
“Zurich has been offering international solutions in the United States for nearly 50 years. This new Side A-only option, in addition to our comprehensive Directors and Officers (D&O) coverage provided by International Towers by Zurich, further enhances our range of offerings, is the latest example of how we are listening to our customers and addressing their evolving needs,” he said Andy Zoller, Head of International Programs at Zurich North America. “Providing them to foreign directors and officers can help these businesses attract and retain top talent. It helps ensure their non-U.S. directors and officers have the management liability coverage they need if or when they need it.”
In other news, Zurich insurance company Cover-More Group announced the appointment of Justin Sebire as interim CEO. Zurich North America recently announced key management changes in the direct market and crop insurance.
