Independent Director Liability Insurance

The current system of buying D&O coverage for independent directors is flawed—resulting in inadequate coverage for directors.  Outside independent directors are typically not involved with the procurement of their D&O insurance.  To improve the coverage for independent directors, NIP has created a new policy, X-PROTECT™, specifically crafted for independent directors.

HOW X-PROTECT™ WORKS:
X-PROTECT™  is a separate policy created exclusively to provide Independent Directors with "state-of-the-art" insurance protection. X-PROTECT™ is the broadest form of coverage on the market for Independent Directors.  Traditional D&O policies often contain exclusions in coverage leaving Independent Directors vulnerable to personal liability.  X-PROTECT™ may supplement the Side-A coverage in a primary D&O policy or in an Excess/DIC D&O policy.  Although X-PROTECT™ may stand alone as primary coverage, it would replace Side-A coverage of such policy only for Independent Directors. 

SOME OF THE EXISTING RISKS INDEPENDENT DIRECTORS MAY FACE UNDER A TRADITIONAL INDEPENDENT D&O POLICY:

• The primary D&O limits have been exhausted by claims against the Corporation.
• A restatement of the company’s financials or a material misrepresentation on an application to an underlying carrier causes rescission of the policy.
• An insurance carrier becomes insolvent causing payment of claims to be jeopardized
• Wrongful denial by the company or the carrier to indemnify
• The corporation’s bankruptcy results in the D&O policy being “frozen” as part of the debtor's estate

WHAT X-PROTECT DOES FOR INDEPENDENT DIRECTORS:

• Explicit coverage for Climate Change, Global Warming or alleged Carbon Emission claims 
• Explicit coverage for violations of Sections 11 and 12 of the Securities Act of 1933
• Expanded Loss definition includes fines, penalties and punitive or exemplary damages
• Expanded coverage for Defense Costs: Personal Profit, Crime or Fraud and Insured vs. Insured exclusions DO NOT include Defense Costs
• No presumptive indemnification or non-indemnifiable loss language. Provides full coverage regardless of the language parameters of the company’s by-laws/charter
• Coverage for claims arising from Non-Profit Outside Position
• No Exclusions for:

            - Employee Retirement Income Security Act (ERISA) claims;
            - Pollution claims;
            - Failure to maintain insurance claims;
            - Section 16(b) of the Securities Exchange Act of 1934 claims;
            - Bodily injury or tangible property claims