Following is a checklist of key issues for a business to review in analyzing the terms and conditions of a Directors' and Officers' Insurance policy.
- Is the dollar amount of the coverage sufficient?
- Is the insurer financially strong?
- Are the premium payments competitive?
- Is the deductible too large?
- Does the policy cover all directors and officers or do they have to be specifically named? Does the policy also cover the corporate entity?
- When can the insured terminate or not renew coverage?
- Are legal fees covered? Does the insurer promise to advance the costs of legal fees in the event of a claim or merely reimburse for out of pocket costs?
- When must claims be made?
- Does the insured have a good history of paying claims (especially important with this type of insurance)?
- Are the exclusions from coverage too broad? These are often negotiable.
- Are their special endorsements that may be appropriate?
- What offsets from coverage apply?
