XL Group Enhances Primary D&O Form

PRODUCT: Executive and Corporate Securities Liability Insurance

COMPANY: XL Group

BEST RATING: A (Excellent)

AVAILABILITY: Coverage is available on an open-brokerage basis for public company-focused firms.

FOCUS: In response to broker requests for specific coverage provisions, XL Group enhances its new Executive and Corporate Securities Liability offering. Richard Wall, vice president of underwriting for XL Group’s Professional team, cites two specific examples as evidence of the company’s deliberate collection and evaluation of broker-partner needs: the addition of plaintiff’s attorney fees associated with the settlement of a merger and acquisition claim, and the inclusion of informal investigation coverage for insured persons brought by a law enforcement or regulatory authority.

“We’re the first to market to fully cover plaintiff’s attorney fees on an un-allocated basis,” Wall says. “And just because an investigation is considered ‘informal’ doesn’t mean it won’t carry substantial costs. Those two enhancements are among the obvious examples of what sets our new policy apart from the competition.”

With essentially every public company already purchasing D&O liability coverage, Wall explains that client purchase decisions are increasingly impacted by breadth of coverage, as well as day-to-day business style and customer service. Noting XL Group is one of the top three writers of public D&O policies in the U.S., Wall says the company offers the best value proposition with the broadest coverage, responsive client service, efficient claims handling and competitive pricing. “With volume comes insight,” Wall says. “We’ve had a tremendous reception from the brokerage community regarding the simplicity of our forms. As litigation and coverage issues increase in complexity, that can prove a tremendous benefit to our clients.”

UNDERWRITING: Capacity up to $50 million. Policy enhancements include expanded coverage for formal and informal investigations by law enforcement or regulatory authority for insured persons. In addition, coverage extends to the company if a formal investigation is launched and the insured individual is concurrently under investigation.

The definition of “loss” has been broadened to include plaintiff’s attorney fees associated with a settlement; Side-A coverage for fines, penalties and taxes levied against an insured individual in the event of company insolvency; civil penalties for FCPA and SOX 308 violations; and damages (inclusive of punitive, exemplary or multiplied damages), judgments, settlements and pre-and post-judgment interest. Allowable defense expenses include expert fees and costs associated with arrest, detainment or incarceration of an insured person relating to company business or for any claims pursuant to SOX 304 and Dodd-Frank 954.

Dedicated coverage grants are available for voluntary interviews, meetings or sworn statements by an enforcement authority and any defense expenses incurred in connection with investigation of a shareholder derivative demand. Also included is full severability of exclusions—meaning a guilty plea by the company, in and of itself, shall not preclude coverage for insured persons. Retention may be satisfied from any source, including any Side-A DIC insurance. The policy carries broad representation severability and is fully non-rescindable.

MINIMUM PREMIUM: None.

TARGET: Publicly traded and large private companies of all types, including Fortune 500s, middle-market and micro-caps, as well as financial institutions, initial public offerings and other M&A-related risks.

COVERAGE TERRITORY: All 50 states.

CONTACT: Richard Wall, vice president/underwriting; XL Group, 100 Constitution Plaza, 17^th floor, Hartford, CT 06103; 860-948-1828.

Amy Skidmore is an IA contributor.