1. MOODY INSURANCE WORLDWIDE
DIRECTORS AND OFFICERS
LIABILITY COVERAGE—
NOT JUST FOR PUBLIC
COMPANIES ................ 1
EMPLOYMENT PRACTICES
LIABILITY CLAIM COSTS
CONTINUE AT RECORD
HIGHS........................ 2
PARTNERING WITH AN
AGENT WHO SPECIALIZES
IN EXECUTIVE PROTECTION
COVERAGE................. 2
UNDERSTANDING DIRECTORS & OFFICERS AND
EMPLOYMENT PRACTICES LIABILITY INSURANCE
What many companies fail to realize is that the personal assets of the
company’s directors and officers and their spouses are at risk for claims
by others relating to the management of the company.
Protecting both business
and personal assets
The exposures associated with Directors &
Officers Liability (D&O) are among the
least understood by both public and
private companies. Just because your
company is privately‐held doesn’t mean
you don’t need Directors & Officers
Liability coverage. If you have employees,
customers, vendors, or competitors, then
you have an exposure to consider. D&O
claims costs have the potential not only to
bankrupt a company but also to put at risk
owners’ personal assets. With D&O policy
premiums at an all‐time low, there is no
reason to leave this exposure uninsured.
While many business owners are familiar
with Employment Practices Liability
Insurance (EPLI), smaller companies may
feel that their exposure in this area is
limited. The truth is that you don’t need to
be a big company to be sued like one.
Many times it’s the small‐ to mid‐sized
company that inadvertently runs afoul of
employment best practices, as their
resources are more limited than larger
employers with fully‐staffed and
experienced HR departments. The good
news is that EPLI premiums are no longer
beyond the budget of a smaller employer.
GROWING YOUR BUSINESS
As you devise a strategy in the new economy to increase your company’s profitability, don’t neglect
the protection piece. The proper insurance coverage that’s competitively priced offers more than
peace of mind; it’s a proven method to safeguard the assets you’ve worked so hard to accumulate.
The cost of claim defense alone, even against unfounded allegations, can run into the hundreds of
thousands of dollars. A carefully conceived and cost effective insurance program puts a fraction of
that money to work in ways that you may not have considered.
focus

2. What you need to know
D&O insurance was created after the stock market crash of 1929 to protect the personal assets
of directors and officers. It was also meant to shield directors and officers from allegations of
breach of fiduciary duties in the overall management of the corporation. It has evolved over
time to provide coverage for the entity as well as the officers themselves. The D&O policy
provides for third‐party claims of financial damages arising from the management of the insured
organization. Possible D&O claimants include Clients & Customers, Competitors, Shareholders
and other Third Parties, even Government Entities. Your D&O policy can be written to include
Employment Practices Liability Insurance, or EPLI can be provided on a stand‐alone policy. Your
insurance agent can guide you on how best to structure your coverage portfolio.
Consider the statistics...
► According to the Chubb 2013 Private Company Risk Survey, the average total cost to the business
of a D&O event, including judgments, settlements, fines and legal fees is $697,902. *
► In 2012 alone, 99,412 charges were filed with the U.S. Equal Employment Opportunity
Commission—just shy of the record high set a year earlier. *
► According to this survey, a common misconception among decision‐makers is that many risks
associated with D&O and EPLI are insured under their General Liability policy. This mistaken
belief leaves 60%‐65% of those surveyed without the proper insurance protection. *
► A key finding of the survey is that in the past three years, 44% of private companies experienced
at least one loss event related to D&O liability, EPL, fiduciary liability, employee fraud, workplace
violence or cyber liability. *
Partner with one of the largest
and most knowledgeable
executive protection
insurance brokers
WH Y BU Y D& O IN SURANC E –
AND HOW DOES EPLI FIT IN?
Customer claims may include issues of debt
collection, refusal or extension of credit,
pricing of services, deceptive trade practices,
restraint of trade, and dishonesty or fraud.
Competitors may allege actions that have
caused them direct harm, for example through
copyright, trade secrets, contract disputes,
business interference, unfair competition,
deceptive trade practices, restraint of trade,
quality of product/service.
Shareholders may bring actions on their own
behalf or on behalf of the company (called
“derivative” action). Shareholders have the
right to assert damage to the company caused
by the D’s & O’s through poor decisions that
cause the company stock to drop, thus
creating claims of breach of fiduciary duty and
breach of loyalty.
Third‐party claims can arise from a variety of
sources—often including environmental and
safety issues, contract disputes, breaches of
fiduciary duty and other related claims.
Claims from Government Entities may include
issues of anti‐trust, dishonesty or fraud,
violations of federal or state laws or misuse/
misappropriation of funds. A government
investigation into potential D&O wrongdoing
can be as expensive as an actual claim.
YOUR
PARTNER:
20251 Century Blvd, Suite 425
Germantown, MD 20874
Toll-Free 800.966.0001
Fax 301.417.0040
www.moodyinsurance.com
Christopher Moody II, CIC
President
christopher@moodyinsurance.com
Potential D&O Claimants
KNOWLEDGE AND EXPERIENCE
To determine the appropriate coverage for your business and secure the most competitive pricing,
work with an insurance broker who specializes in executive protection. Moody Insurance Worldwide
has been serving the needs of businesses and individuals for over half a century. Moody works with
companies of all sizes across the U.S., providing technical expertise in many industry areas.
Representing the largest, most financially sound insurance companies, Moody Insurance Worldwide
brings to the table options and risk management solutions tailored to your needs.
* For the 2013 Chubb Private Company Risk Survey, POLLARA, a leading public opinion and market research firm was
commissioned to conduct a telephone survey of 450 decision‐makers in U.S. private companies to ascertain concerns
about corporate risks and uncover risk‐mitigation strategies.
Employment Practices Liability
Claims from Employees (present, past, and
prospective) are the fastest growing against
Directors & Officers. These claims include
harassment, hostile work environment,
wrongful termination, discrimination, breach
of employment contract, failure to promote,
defamation of character, and other
employment‐related allegations.
Employment‐related legal actions are among
the most prevalent in the U.S. today.