1. Coverage Components

Coverage for wrongful acts (errors and omissions)

Coverage for defense costs

Coverage for settlements and judgments

Coverage for employment practices liability

Coverage for regulatory investigations

2. Policy Limits

Determine appropriate coverage limits

Assess aggregate limits versus per-claim limits

Consider excess or umbrella coverage options

3. Exclusions

Review common exclusions (fraud, criminal acts, etc.)

Understand the implications of policy exclusions

Identify any specific exclusions relevant to your industry

4. Insured Parties

Define who is covered under the policy (directors, officers, employees)

Include coverage for former directors and officers

Ensure coverage for subsidiaries and joint ventures

5. Claims-Made vs. Occurrence Policies

Understand the differences between claims-made and occurrence policies

Determine which type of policy is more appropriate for your organization

6. Retention and Deductibles

Review the retention or deductible amounts

Assess the impact of higher retention on premium costs

7. Policy Period

Determine the policy duration (annual, multi-year)

Consider the implications of policy renewal

8. Premiums and Payment Options

Review the premium structure

Explore payment options (lump sum, installments)

9. Risk Management and Mitigation

Assess your organization's risk management practices

Identify areas for improvement to reduce risk exposure

10. Legal and Regulatory Compliance

Ensure compliance with applicable laws and regulations

Review any industry-specific requirements for D&O coverage

11. Broker and Insurer Selection

Evaluate the experience and reputation of the insurance broker

Research potential insurers’ financial stability and claims handling history

12. Review and Update Process

Establish a regular review process for the D&O policy

Update coverage as needed based on organizational changes or risk exposure

13. Employee Awareness and Training

Implement training programs for directors and officers on D&O coverage

Ensure awareness of policy details and reporting procedures for claims

14. Additional Considerations

Explore additional endorsements or riders that may be beneficial

Consider the impact of mergers, acquisitions, or significant changes in operations on coverage needs

This checklist provides a comprehensive outline of the important aspects to consider when evaluating D&O insurance.