Public Company Directors & Officers Liability Insurance
Most public company D&O programs have 20 or more correctable gaps. We find them. Vertical Risk Management delivers institutional-grade management liability expertise and a confidential program review that reveals exactly what your current broker missed.
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Directors & Officers Liability
The centerpiece of every public company program: protects individual directors and officers from securities class actions, shareholder derivative suits, SEC and DOJ investigations, and M&A litigation.
Employment Practices Liability
Covers discrimination, wrongful termination, harassment, retaliation, and wage and hour claims, where public companies face heightened scrutiny and class action potential.
Fiduciary Liability
Protects plan fiduciaries personally against participant claims, Department of Labor investigations, and ERISA breach-of-duty allegations tied to 401(k), pension, and benefit plans.
Crime Insurance
Covers employee dishonesty, funds transfer fraud, social engineering, and forgery, coordinated precisely with cyber coverage so claims do not fall between the two policies.
Cyber Liability
For a public company a breach is both an operational crisis and a securities disclosure obligation; cyber coverage must address ransomware, business interruption, and data recovery while coordinating with D&O for the litigation that follows.
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Cyber Liability Insurance 101
Learn more about cyber liability insurance so you can make an informed decision on your coverage.
Cyber Liability Coverage
Risk Factor
The Internet has spun a whole new web of liability exposures. E-commerce, social networking, cloud storage, and other technologies bring great benefits to large and small businesses alike. But with these benefits also come challenges, including protection of privacy, data, and financial information of your customers. If this information is lost, stolen, or compromised, your company is at risk. In fact, you may even be required by law to alert those impacted by the breach and to pay for any financial loss incurred.
Solution
Cyber liability coverage offers protection due to unauthorized access of electronic data or software within your network. It also provides coverage for spreading a virus, computer theft, extortion, or any unintentional act, mistake, error, or omission made by an employee. This coverage is quickly becoming more and more important as you embrace technology to help run your business.
First-Party Coverage
Risk Factor
If your company is faced with a data breach or cyber-attack, you may be forced to cover breach-related expenses such as crisis management, hiring a public relations firm to manage a data breach incident, costs associated with forensic analysis, the cost of repairing and restoring computer systems if there is a virus that destroys business software and data, and the loss of business income resulting from a data breach.
Solution
First-party coverage will insure your business for losses to your own data or lost income or for other harm to your business resulting from a data breach or cyber-attack. This coverage will pay you for things like business interruption, the cost of notifying customers of a breach, and even the expense of hiring a public relations firm to repair any damage done to your image as a result of a cyber-attack. Having this funding available in the event of a crippling hack can keep the lights on till you’re able to resume your normal business operations.
Business Income
Risk Factor
What would you do if an email virus impacted the operation of your database and prevented you from serving clients for a day or more? Or what if a hacker or cyber-criminal caused a system outage or extended downtime, leaving your business inoperable? These and other events can destroy your ability to serve clients and bring in revenue, which can have a major long-term impact on the viability of your business.
Solution
Business Income and Business Interruption coverages help with financial hardships, such as loss of income or operating costs, that you bear due to a covered incident.
Third-Party Coverage
Risk Factor
If your business handles sensitive customer data (such as email lists, credit card records or other files), data breaches pose a serious threat to your financial stability. A lawsuit resulting from a data breach means your business is responsible for paying legal fees, court-ordered judgments or settlements and other court-related costs.
Solution
Third-party coverage protects you in the event of a lawsuit brought by a customer or partner for a data breach that your business' actions or negligence allowed.
Regulatory Claim Coverage
Risk Factor
If your business experiences a data breach or violation of confidential information during regular business operations, you may be found in violation of privacy laws and be required to pay fines for the violations or other regulatory issues.
Solution
You may be eligible for regulatory claim coverage which would offer protection in response to proceedings related to disclosure laws and other governmental actions that can result in defense costs, fines and/or penalties. Coverage does vary and may be restricted by local law.
Ransom Coverage
Risk Factor
If hackers gain control of critical systems, they may demand a ransom be paid to avoid additional consequences. Sometimes these can be empty threats, but it’s impossible to know for sure. Paying the ransom can be costly. Taking a chance by choosing not to pay can sometimes put a company out of business.
Solution
Coverage for ransom and cyber extortion can be included in cyber liability policies and can help cover the cost of ransom to regain control of network systems. This is often not included in a standard policy, may include a separate sublimit and deductible, and may require adherence to certain conditions set forth by the insurer.
One Coordinated Management Liability Program
Public company management liability requires each coverage line to work in concert. Most brokers place them in silos, leaving gaps precisely where claims arise. Any broker can place a management liability policy. What sets VRM apart is the depth of expertise behind every program, and the confidential, independent review process that consistently finds what others miss.
What We Find
The deficiencies below appear routinely in programs placed by generalist commercial brokers, and every one is correctable:
- Missing standalone Side A difference-in-conditions coverage that protects individual directors when the corporation cannot or will not indemnify them.
- Unfavorable Side A / Side B allocation provisions.
- Batch and deemer clauses that group related claims into the wrong policy year.
- Insured-versus-insured exclusions that fail to carve out shareholder derivative suits.
- Defense costs that are not advanced unconditionally.
- Prior acts retroactive dates quietly shifted at renewal.
- Change-in-control and run-off coverage that is never triggered on the terms the board expects.
- Excess policies that do not truly follow the primary form.
- Employment practices wage and hour exclusions that wipe out class action defense costs.
- Crime and cyber policies that each deny cyber-enabled fraud because neither is coordinated with the other.
A Free, Confidential Program Review
The typical public company management liability program contains 20 or more deficiencies like these, most correctable without changing insurers. Our review is protected by a mutual nondisclosure agreement, so your incumbent broker never sees what we find or even knows you contacted us. We review every policy across all five lines, check coverage coordination, and deliver a written findings report that is specific, prioritized, and actionable, with the steps required to correct each deficiency. No cost. No commitment. If you decide to stay with your existing program, that is your call. But most companies that complete a VRM review make changes.
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Fifty Years of Management Liability Experience
VRM’s founding broker has worked management liability programs for more than five decades, including major D&O claims for some of the nation’s largest public companies with leading carriers. That claims-side depth informs how we read policy language, negotiate endorsements, and build programs that hold up when they are needed most. We have also spent years developing a proprietary library of manuscript endorsements and negotiated policy language that is simply not available through standard market submissions, so our clients receive customized coverage provisions their prior brokers, and often their current carriers, have never offered them.
To schedule a confidential program review, contact Jeff Hallman, Executive Vice President, Vertical Risk Management, LLC, at or . All inquiries are covered by a mutual nondisclosure agreement; your current broker is never notified.
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