Small public technology company relies on 78 year old semi-retired personal insurance broker, who is a “friend” of the founders, to place their D&O policy. Broker recommends and places $10M D&O and EPL limit for $125,000 without adequately consulting with the company to determine an appropriate limit. At renewal, pricing increases by 22% to $145,000. Board questions the need for $10M given their modest market cap and feels the cost is excessive high.

Solution: InsurePro conducts thorough analysis of the appropriateness of the $10M limit and D&O market, and provides several formulas to the board to help them determine what limit to carry, as well as offering many innovative options to the board. By restructuring the the policy to sublimit the Employment Practices limit to a more reasonable level, and aggressively remarketing the coverage InsurePro saves the client $17,000 and wins the account and thanks of the board.

Moral of the Scenario 1: The company was utilizing a broker that was “out of his league”, was being overinsured and overpaying. It required the services of a more pro-active D&O broker with the expertise to help them assess their coverage needs and select appropriate limits.

Incumbent agent was not “aware” his insured was a public company and wrote the D&O coverage on a private company form. When he realized his mistake he renewed it on the correct form but forgot to do two things: explain why the premium increased 186% and the retentions by 500% and; to place Employment Practices coverage, which was included automatically in the private form. What now happens to any EPL prior acts that the company is sued for? (we hope the agent has E&O insurance himself). On top of all of this the market cap of the company is $45M and he had only recommended $1M of coverage.

Solution: Upon discovering the source of the large renewal increases for the client, and the gaps in coverage, and the fact that the client was underinsured, they immediately placed $4M of excess D&O coverage and a separate EPL policy with InsurePro, and fired the agent.

Moral of the Story: For six months after the renewal, and until they brought in an insurance consultant and retained our firm, the client was unaware there was a problem. Once this was brought to their attention, they immediately concluded they had outgrown their agent and should align with a firm with the necessary professional liability expertise to advise them properly.

At InsurePro, D&O is our specialty. Whether a large privately-held firm or a small-cap public company, we understand the appropriate forms, have access to all carriers in the market place (typically 15-20), and the skill and experience to effectively negotiate your coverage and premiums.

• Thoroughly and professionally analyze your current coverage and the adequacy of your limits and rates
• Submit your D&O application to a minimum of 15 insurance companies
• Prepare a detailed proposal with a market overview, findings and recommendations
• Stay pro-actively involved and focused on your D&O policy
• Deliver customized terms and conditions by leveraging our knowledge and market relationships.