What is D&O Insurance for international businesses?
D&O insurance is designed to help protect directors and corporate officers against liability claims. In today’s evolving global marketplace, CEOs, boards of directors and other members of a company’s executive leadership team face an ever-growing web of legal and regulatory challenges at home and abroad.
While many D&O policies originated in the U.S. provide worldwide coverage, there are often important limitations on the ability of policies to help protect individuals in foreign jurisdictions. Each country has its own insurance regulations and many do not permit insurance from unlicensed carriers (non-admitted insurance). Typically, U.S. insurance companies are not licensed outside the U.S., so even if a company provides non-admitted insurance, a country may not recognize coverage from a U.S. policy.
What’s at risk if D&O coverage does not extend to a foreign country?
A main component of D&O insurance is coverage for Non-Indemnifiable Loss, also called “Side-A” coverage. This means directors or officers are unable to be indemnified by their company and will need direct coverage from the D&O policy to protect their personal assets. But since many countries do not allow non-admitted coverage, there can be a significant gap in protection when a Side-A loss occurs, causing directors’ or officers’ personal assets to be frozen in a liability action.
Even though a multinational company may have purchased locally admitted policies as part of their D&O liability insurance program, such policies often have one limit shared between U.S. and international exposures. This means that a D&O liability claim in the U.S. could erode the policy limits, leaving directors and officers in other countries with reduced protection. The reverse could also occur, with a foreign D&O liability claim eroding the limits available to directors and officers in the U.S.
How does International Towers by Zurich D&O Insurance help fill the gaps?
International Towers by Zurich provides a dedicated foreign D&O limit for U.S.-domiciled multinational companies. International Towers by Zurich does not cover U.S. claims, insulating the foreign limit from U.S. loss, and includes locally admitted policies to help ensure foreign directors and officers have compliant coverage. Zurich’s International Programs utilize locally admitted, fully compliant policies issued by locally licensed insurers that are part of Zurich’s global network, which today extends to more than 200 countries and territories.
International Towers by Zurich can be included as a key component of an International Program Insurance structure originated and centrally managed in the U.S. Through the inclusion of a Zurich International Towers program, foreign directors and officers can get admitted D&O coverage that can help fill the gaps associated with Side-A claims in countries that do not permit non-admitted insurance. Under the program, the policy limits of all locally written policies provided by members of Zurich’s global network are interlocked to create a single global aggregate limit.
How can International Towers by Zurich be tailored to a customer’s business needs?
International Towers by Zurich has two product offerings: our original full coverage D&O International Towers by Zurich and our Side-A-only International Towers by Zurich Executive Universal Select policy. A customer is able to select the program that best fits their needs.
Benefits of International Towers by Zurich’s full coverage offering:
- Includes both indemnifiable and non-indemnifiable coverage.
- Local policies include both indemnifiable and non-indemnifiable coverage.
- The U.S. parent company receives the benefit of Financial Interest Coverage for Indemnifiable Loss where no local coverage was purchased or is available.
Benefits of International Towers by Zurich Executive Universal Select (Side-A only) offering:
- The U.S. master policy and local policies provide Side-A only coverage. This structure allows customers to purchase local policies to cover their non-indemnifiable exposure in non-admitted not permitted territories (the most essential international exposure for D&O) without having to pay for other D&O coverage parts.
Why choose Zurich for D&O coverage?
Zurich’s International Towers program is built on our expansive global footprint and deep experience in the delivery of Management Liability Insurance coverages. Zurich can tailor effective, locally compliant D&O Liability solutions wherever a company does business, with:
- D&O coverage options for publicly traded, private and nonprofit companies as well as initial public offerings (IPOs)
- Multiple International Program structures to fit a customer’s needs
- D&O Claims team members who are attorneys and understand the current litigation environment and global exposures
- Local claims expertise in over 200 countries and territories
Find out more about International Towers by Zurich
It’s a complicated world, becoming more complicated and challenging for directors and officers of multinational companies every day. Zurich has the talent, experience and global footprint to help provide the solutions you need, wherever and whenever you need them.
This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, provided solely for informational purposes. Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company, 1299 Zurich Way, Schaumburg, IL 60196. Your policy is the contract that specifically and fully describes your coverage, terms and conditions. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy. Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states. Some coverages may be written on a non-admitted basis through licensed surplus lines brokers.