D&O policies are designed to protect individuals for claims arising out of the management/stewardship of the company. Professional Indemnity policies contemplate the trading risk of the organisation arising out of the provision of services to customers.
Insurers will generally require copies of the last two annual reports and the latest interim financial statements. A copy of the business profile and a statement of future business plans is also helpful in order for the insurer to gain a full appreciation of the exposure. Particular attention is paid to past profit performance , liquidity and the relationship between assets and liabilities.
Should renewal of the policy be refused by the insurer, then the insured has the option to purchase (for an additional premium) an additional period of 12 months coverage during which they can report any claim which arises out of a wrongful act committed prior to expiry. The discovery clause is not available should the insured elect not to renew their policy.
This term refers to the position held by an officer of a company at the specific request of the company for the purpose of representing its interests in another organisation.