Buyers of directors and officers liability coverage who have settled claims with their primary insurers may find disgruntled excess carriers unwilling to pay out on their layers for large claims–even when excess policies contain “follow-form” language.
Insurance glossaries define a “follow-form” policy as an excess liability policy that provides coverage identical to that provided by a specified primary liability policy. But even identical language doesn't mean excess insurers have the same interests as primaries in quickly resolving claims, nor does it guarantee identical interpretation of that language, excess insurers say.
“Our policy should only respond when the underlying is exhausted, not tired,” said John Kuhn, chief executive officer of AXIS Professional Lines, speaking at the D&O Symposium of the Professional Liability Underwriting Society earlier this year.
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