Executive liability insurance is more important today as the business world evolves. There has been an increase in the number of lawsuits filed against those who manage corporations or serve on their boards of directors. Unlike a typical general liability claim, however (claims alleging bodily injury or property damage arising out of your negligence), these lawsuits assert personal liability on the part of the executives, thus placing their personal assets at risk.
Laws pertaining to executive liability exposures along with rapidly evolving insurance coverage forms combine to make this a complex issue. The Private Securities Litigation Reform Act aimed to shield corporate directors and officers from liability. On the other hand, the Family and Medical Leave Act increased the risks faced by executives. Court rulings interpreting these statutes are being issued almost daily.
Lastly, as the nature of these risks have changed, so have the insurance policies written to cover them. Employment practices liability, for example, when first introduced in the early 1990s, was much narrower in scope than the policy forms that are currently available.
Given the swiftly changing environment, corporate executives require the protection afforded by complex, highly specialized insurance policies. These include:
- Directors and Officers Liability
- Employment Practices Liability
- Fiduciary/Employee Benefits Liability
- Kidnap/Ransom/Extortion Liability