Why Broad Management Liability Protection Is Critical for Private Companies During Economic Recovery
What has not been tempered, unfortunately, says Kristie Felton, vice president of management liability, for Liberty International Underwriters (LIU), are the risks privately held companies continue to face as the recovery continues to drag. One way agents and brokers can help these companies protect their executives and assets during poor economic conditions is through a strong management liability insurance policy.
Felton notes that while the idea of boosting insurance coverage when trying to keep costs down may seem counter-intuitive, risk managers and senior management should take a hard look at the benefits of coverage. Not only can the right insurance policy provide protection against an unforeseen matter, but it can also provide access to experienced claims attorneys if the company finds itself in litigation.
To help agents and brokers protect their clients, LIU offers its Private Advantage Company Combo policy, a suite of five separate coverage parts that offer protection for directors and officers of private companies from many of the complex liabilities involved in doing business today.
"As a modular policy, Private Advantage gives brokers the opportunity to choose which of the five coverage parts would offer the best protection for their clients' needs," says Felton.
The five modules of the suite include:
-- Employment Practices Liability
-- Fiduciary Liability
-- Commercial Crime Coverage
-- Directors and Officers Liability
-- Pollution Defense Costs Coverage, including global warming
In a down economy, executives face numerous pressures including countering falling revenues and profitability that can force tough decisions such as layoffs, reductions in benefits and scaling back operations. Couple those pressures with a stringent regulatory environment and companies can be exposed to unforeseen litigation such as failing to provide proper notification of a reduction in force to its employees.
LIU Private Advantage's employment practices coverage is especially timely, as the EEOC and state regulatory bodies are getting increasingly tougher on employers' record keeping.
"Discrimination and sexual harassment were the prime risks when employment practices coverage first emerged," Felton says. "While those risks are still of great concern for companies, as employment liability laws continue to evolve new risks are constantly being added to the list of exposures. Today, record keeping issues such as proper classification of hourly employees are among the top EPL risks for companies and, as new laws come into effect, companies will face the additional burden of remaining aware of, and complying with, changes that occur."
Another area of increasing risk stemming from the long economic recovery is employee/ internal crime. As people struggle to make ends meet at home, they may feel less inhibited to steal from their employer because of anger over pay cuts or reduction in employee count forcing them to work more hours. Concurrently, with companies paying closer attention to spending, they are more likely to uncover employee or internal crime that had gone undetected during good economic times.
Unfortunately, even as companies struggle to protect their operations from economic risks, global warming-related allegations continue to grow and are becoming a much more potent loss driver. With litigation stemming from the alleged improper release of carbon dioxide and other greenhouse gases increasing, LIU's Private Advantage Company Combo is the only policy that offers a separate and dedicated limit for pollution defense cost coverage for directors and officers of private companies.
Whether helping protect clients from today's economic risks or future CO2 footprint scrutiny, with LIU agents and brokers can offer their clients an admitted policy provided by a financially-strong insurer dedicated to the market.
"It sounds basic, but you want your insurer to honor its promise when you are in trouble," Felton says. "With our Private Advantage Company Combo suite, LIU brings together our history of commitment to the industry with a new, flexible, innovative way to deliver much-needed coverage to businesses."
For more information, contact Kristie Felton, vice president of management liability, at firstname.lastname@example.org or (415) 983-4511.
(The above piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for Insights was written and edited by Risk & Insurance«
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October 13, 2010
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