SIR, Self- Insured Retention
Instead of a deductible which an insured pays at the end of a claim, a self-insured retention is more commonly utilized by executive management policies and require the insured to pay all costs incurred at the beginning of a claim until the SIR amount is met at which point the insurance carrier then starts paying.
Claims Made policies only provide coverage for claims that are made during the policy period – regardless of when the alleged wrongdoing by the insured took place. Restrictive terms may apply. This is unlike property, auto and general liability policies that are Occurrence type policies – which provide coverage for any covered incident that “occurs” during the policy period regardless of when the claim is made.
Duty to Defend – the insurance company orchestrates and pays for defense and settlement
Reimbursement – The insured orchestrates and pays for defense. Expenses are submitted to carrier for reimbursement. Premiums tend to be much lower and they allow the insured to choose defense counsel, however claim costs can be catastrophically expensive. As such, they are not often recommended.
Want to know where most private company D&O claims come from?
Have questions about your D&O policy or exposure? Want to know more?
*An HR Specialist is kept on retainer for clients to call with questions on regulations, compliance and challenges
Carol L. Corporales, CIC, MLIS