Directors & Officers Liability

Insurance against the decisions you make

D&O….Why do you need it?• Employment Practices

• Tax issues, Locally, Provincially and Federally

• Competition Act

• Privacy Act

• The decisions that you & your board make and the ramifications they have on the community at large

Policy Overview

1 Insuring Agreement– The Insurer’s obligation to pay on your behalf as a result of a

“Claim” made against the chamber during the policy period for a “Wrongful Act” and reported to the insurer no later than 60 days after the end of the policy.

2 Definitions– Spells out specific terms used in the contract such as what they

mean by “wrongful act”, “Claim”, “Insured”, “Interrelated Wrongful Acts”, “Loss”, etc.

Policy Overview

3 Exclusions– Claims related to Bodily Injury, Death, Disease, Mental Anguish

(except for under EPL), assault, battery, destruction of tangible property etc.

– This part of the contract narrows the events under which the insurer is liable.

4 Limit of Liability and Retention

Directors & Officers (D&O)

Limits per Policy (Defense Cost Inclusive)

• Maximum Limit Per Occurrence $2,000,000

• Maximum Limit Per Pol. Period $2,000,000

Retention's• Each Insured Persons NIL

• Insured Company $________

• Insured Entity $________

Coverage Summary

Insuring Agreements• A - Insured Persons (Directors)

• B - The Organization (which the insured persons become legally obligated to pay)

• C - Insured Entity (which the Insured Entity becomes legally obligated to pay as a result of a Securities Claim made against the Entity during the policy period)

Coverage Summary

Discovery Period

• Extends the coverage period beyond the natural expiry date should you choose to not renew this contract. Offers an additional 12 months of protection calculated at a rate of 50% of the annual premium.

Coverage Summary

Definitions (Claim)

• A written demand for monetary or non-monetary relief made against any “insured”

• a civil, criminal, administrative proceeding made against any “insured” seeking relief.

Coverage Summary

Wrongful Act (shall mean)

“Any actual or alleged act, omission, error, misstatement, misleading statement, neglect or breach of duty, or Employment Practices Wrongful Act, by any Insured Persons in their capacity with the Company”

“Any matter claimed against any Insured Persons solely by reason of their status with the Company;”

Coverage Summary

Wrongful Act (shall mean)

Any matter claimed against any “Insured Person” arising out of their service as a director, officer, trustee, or governor of an Outside Entity, but only if such service is at the request of the Company.

Coverage Summary

EPL = Employment Practices Litigation (Claim)Defined as;• Wrongful dismissal, discharge or termination of

employment, whether actual or constructive;• employment related misrepresentation• sexual or workplace harassment of any kind• discrimination• wrongful failure to employ or promote

Coverage Summary

EPL = Employment Practices Litigation (Claim)Defined as;

• wrongful discipline

• wrongful deprivation of career opportunity, including defamatory statements made in connection with an employee reference

• failure to grant tenure• negligent evaluation

• failure to provide adequate workplace or employment policies and procedures

Coverage Summary

EPL = Employment Practices Litigation (Claim)Defined as;• wrongful retaliation; or• employment related libel, slander, defamation, or

invasion of privacy.

Coverage Summary

Exclusions to Watch Out for;

• Losses where and Insured person stands to gain or profit from the claim

• Deliberately fraudulent or criminal acts of any Insureds

• Prior claims not disclosed to insurer

Except for Claims under EPL

Coverage Summary

Exclusions to Watch Out for; (continued)

• for any actual or alleged:– Bodily Injury, sickness, disease or death of any

person– Damage to or destruction of tangible property– mental anguish, emotional distress, invasion of

privacy, wrongful entry, eviction, false arrest, false imprisonment, malicious prosecution, libel or slander*

Coverage Summary

Exclusions to Watch Out for; (continued)

• Wrongful act of any insured in connection with any pension or welfare plans of the company.

• Pollution related claims• Claims brought forward by Directors of the corporation

(i.e.. Cross claim situations)• Wrongful Acts of any Subsidiary or the Insured Persons

of such Subsidiary or any entity that merges with the company.

Coverage Summary

Exclusions to Watch Out for; (continued)

• Wrongful acts insured in whole or in part by another insurance contract, whether such other policies are stated to be primary, excess, contingent or otherwise.

• For failure to afford an employee with reasonable notice of termination under an EPL claim.

Coverage Summary

Exclusions to Watch Out for; (continued)

• There is no coverage under this contract resulting from the performance of any type of services for fee’s. (Professional Services Exclusion)

• No coverage provided by this contact for the failure to effect and/or maintain adequate insurance(s).

Coverage Summary

Limits and How they are Applied• The insurer is liable to pay 100% of Loss in excess of

the applicable Retention amount stated in the policy (Limit of Liability)

• Cost of Defense shall be part of, and not in addition to, the limit of liability provided by the policy.

• The insurer’s liability for all Loss shall be the amount shown in policy declarations (Limit of Liability) for the policy period, regardless of the time of payment or the number of claims.

Coverage Summary

Obligations under Loss (Insured)“The insured shall not incur Costs of Defense, or admit liability, offer to settle, or agree to any settlement in connection with any Claim without the express prior written consent of your insurer, which consent shall not be unreasonably withheld. The chamber (& directors) shall provide the Insurer with all information and particulars it may reasonably request in order to reach a decision as to such consent. Any loss resulting from any admission of liability, agreement to settle, or Costs of Defense incurred prior to the Insurer’s consent shall not be covered by this policy.”

Coverage Summary

Obligations under Loss (Insured)Notice of Loss;

The Insureds shall, as a condition precedent to their rights under this Policy, give the Insurer notice in writing of any Claim:

(1) Such notice shall be given prior to the end of the Policy Period

(2) Such notice shall be given as soon as practicable, but in no event later than 60 days after the end of the Policy Period.

The Insureds failure to report a Claim pursuant to (1) above, shall not negate the right to report a Claim pursuant to (2) above under this Policy or any renewal thereof.

Coverage Summary

Obligations under Loss (Insured)Notice of Loss;

If, during the Policy Period or Discovery Period, any Insured first becomes aware of a specific Wrongful Act and gives notice to the Insurer of:

(1) the specific Wrongful Act

(2) the injury or damage which has or may result therefrom; and

(3) the circumstances by which the Insured first became aware

thereof; the Claim arising out such Wrongful Act shall be

deemed to have been made within the insurable time frame.

Coverage Summary

General Conditions under your Policy;Cancellation - Insured may cancel this policy, providing written notice to the insurer at any time. Cancellation is calculated on a short rate basis.

Cancellation - Cancelable by the Insurer providing 30 days written notice sent by registered mail. Unearned premium is calculated on a Pro-Rated basis.