At Knapp Schenck we have a wealth of experience in assisting our commercial customers with the broad array of loss exposures that fall under the term Executive Risk. The most effective risk management strategy to adequately address these exposures is one that involves both the implementation of proper risk control techniques and the procurement of insurance coverage specifically designed to address the financial loss associated with these exposures.
Both directly through the insurance companies we represent and indirectly through our network of strategic partners, we have access to a wide spectrum of insurance products and ancillary services that enable us to assist our customers in establishing a strategy that best meets their specific needs.
The general exposure categories associated with Executive Risk include:
- Directors and Officers Liability/Outside Directors Liability
- Employment Practices Liability
- Fiduciary Liability
- Kidnap and Ransom
- Liability arising from the activities of employed lawyers.
Directors and Officers Liability/Outside Directors Liability
Directors, Officers and employees, of corporate organizations (whether or not the corporate organization is private or public, for profit or not for profit) are personally at risk from claims arising out of the decisions they make. Corporate charters often contain indemnification provisions for these individuals, however, such indemnification will not extend to every possible claim scenario. Furthermore, corporate indemnification are only effective if the financial component of the corporation’s risk management program is properly funded or insured.
Employment Practices Liability
Employment Practices Liability (EPL) exposures include legal and/or regulatory action brought by employees and/or outside parties (including regulatory agencies) against corporate entities, it’s Directors and Officers, and it’s employees, for alleged discrimination, wrongful termination and/or workplace harassment (sexual or otherwise).
Fiduciaries, defined as individuals that are responsible for the design, administration, and management of any employee pension, benefits program, and/or welfare plan, can be held personally liable for any breach of their duties such as those described in the Employee Retirement Income Security Act of 1974 (ERISA).
Crime exposures for corporations can take many different forms from the theft of money and securities by an employee to the forgery of financial instruments or theft of liquid assets through the act of computer fraud perpetrated by outside parties to name a few.
Kidnap and Ransom
The kidnapping of employees and the resulting extortion of company assets in today’s far reaching global economy is an unfortunate fact of life. It is a necessity for corporate managers to understand this exposure.
Corporate in house attorneys can face liability exposures (such as providing incidental legal services to non client third parties) that don’t fall under other forms of Executive Risk insurance. Thus, financial protection for such exposures must be procured through a specific policy.