The brokerage community is welcoming—albeit with some reservations about its pricing—the newest product in directors and officer (D&O) insurance policy enhancements that cover the costs of informal regulatory investigations.
Unlike last year's flood of "pre-claim inquiry" offerings that focused on coverage for the investigation-response costs of individual executives and directors, Chartis' new "Investigation Edge" offering, a standalone policy introduced in March, addresses corporate costs, including the massive expenses associated with producing documents required by the Securities and Exchange Commission (SEC).
"There was a misperception of what coverage was available in the marketplace for SEC investigations before this Chartis coverage came out," says Carolyn Polikoff, senior vice president and leader of the Corporate & Executive Protection practice of San Francisco-based Woodruff-Sawyer. "Many companies believed entity-response costs were covered under a traditional D&O policy. The fact is they weren't, and it wasn't carrier-specific. No carrier was covering that [before Chartis] because it was so expensive."
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