25 Basic Questions Bankers Should be Asking Their D&O Liability Carrier

1. What defines a claim?
2. Are the limits and retentions in place above, below or at peer group based on assets and risk tolerance?
3. What is the annual aggregate limit of the policy?
4. What endorsements to the D&O policy cover the directors and officers and what endorsements cover the entity?
5. Does the policy provide coverage for prior acts with no retro dates?
6. What is the Insured and Employee definition and how long is coverage extended after the individual leaves the Board or Bank?
7. What are the notice requirements when an insured becomes aware of a fact, circumstance or event that could give rise to a claim?
8. Based on which individual’s knowledge of such a fact, circumstance or event does the requirement to report a claim begin (Chairman, CEO, General Counsel, HR, etc.)?
9. Who controls defense in claim matters, insurer or insured?
10. Does the policy provide coverage for defense, settlements or judgments for claims brought forth by regulators or examiners against a director, officer or entity?
11. Will the policy defend a Civil Money Penalty against a director, officer or entity?
12. If two endorsements of the policy are triggered by one claim how are limits allocated?
13. Does the policy contain a consent to settle provision (hammer clause)? If so, how does this provision apply if the insured decides not to settle a claim after the insurer has offered settlement?14)
14. Will a paid claim against an entity erode the limit for potential future claims against the directors and officers 
15. What are the Insured versus Insured (IVI) carve backs? Make sure the policy contains an IVI carve back for receiver in post failure matters, per FDIC.
    
16. Is the policy or at least “Side A” rescindable for any reasons except for nonpayment? If so what are the reasons
17. Is there a separate “Side A” limit or is the “Side A” limit combined with the “Side B” limit?
18. When a multiyear policy is offered that contains a multiyear rider, under what circumstances can the insurer change the terms, conditions or pricing?
19. What are the extended reporting options and under what circumstances can it be triggered?
20. What professional services are included or excluded from the Bankers Professional Liability and Company Professional Liability endorsements?
21. What exclusions could prevent a claim from being paid?
22. A loss is the amount that an insured person or entity is legally obligated to pay. What does a loss not include?
23. Does the policy provide coverage for the directors, officers and entities for claims brought forth by shareholders?
24. If during the policy period the insured acquires another organization, assumes assets or liabilities of an organization or creates a subsidiary, what asset increase percentage will trigger the insurer to review policy and potentially make changes (limits, retentions, premium, and policy language)?
25. Are the directors and officers covered for cyber liability claims on the D&O Liability form or the Cyber Liability form?