B. Errors and omissions (E & O) liability insurance

C. Employment practices liability insurance (EPLI)

D. Crime insurance

E. Fiduciary liability insurance

F. Employed lawyers professional liability insurance

2. CONTACT

Tom Cain, Product Manager
Executive Risk Specialty Insurance Co.
82 Hopmeadow Street
Simsbury, CT 06070-7683
(800) 432-8168
FAX (860) 408-2288
Email: [email protected]

3. UNDERWRITING GUIDELINES

The policy is available to all classes and sizes of business, including public, private and not-for-profit.

An ERSIC application is required, including the history of the insurance policies over which the FLEX policy will apply, a loss/claims history, and information on situations the insured knows about that might reasonably give rise to claims affecting the coverage in the future. The application is attached to and becomes a part of the FLEX policy.

ERSIC will write over other carriers providing the primary coverage, as well as existing Executive Risk policies.

4. AVAILABILITY

The policy is available on a non-admitted basis except in California, where it is admitted.

5. LIABILITY

LIMITS AVAILABLE. Limits available are $25 million per claim and $50 million in the aggregate.

INSURING AGREEMENT. The Underwriter will provide insurance that is excess to all “underlying insurance” that is included in each listed “program of insurance” for “triggering events”. This means that the FLEX policy applies as excess over any or all of the policies that are scheduled as underlying coverages. Unless otherwise noted in the FLEX policy, the coverage conforms with the terms, conditions, and endorsementsincluding any applicable retentions, deductibles, or extended reporting optioncontained in the policy of “underlying insurance” that falls immediately beneath the FLEX policy in each individual category of insurance included.

Coverage under the FLEX policy attaches only after all the “underlying insurance” that applies has been exhausted by actual payments.

Words in italics are defined in the policy.

DEFINITIONS. The following terms are defined:

A. Named Insured means the person(s) or entity(ies) that are identified on the declarations page, Item 1.

B. Policy Period means the period between the inception and expiration dates of the policy, as noted on the declarations page, item 2.

C. Program(s) of Insurance means each separate category of insurance that is identified on endorsement no. 1 that is attached to the policy. Examples of a “program of insurance” include crime insurance, directors and officers liability insurance, fiduciary liability insurance, or other professional liability lines of coverage that are identified on endorsement no. 1.

D. Triggering Event is a loss first discovered during the “policy period” when the “underlying insurance” is a bond. With other types of policies, whether written on a claims made, occurrence, or other basis, a “triggering event” is a claim first made during the “policy period”. Both of these types of “triggering events” must involve a person or entity entitled to coverage under the FLEX policy.

E. Underlying Insurance is defined as each insurance policy that makes up all or part of a category of insurance as scheduled in endorsement no. 1, as well as all renewals or replacements of those policies. Examples of “underlying insurance” would be a specific primary directors and officers liability policy that is included within the directors and officers' liability “program of insurance” or follow form primary and excess employee dishonesty bonds that are included within the crime “program of insurance”.

WHO IS INSURED. This follows the underlying insurance policy for the each applicable “program of insurance” that is scheduled immediately underneath the FLEX policy.

WHAT IS INSURED. The policy provides excess professional liability coverage over the various insurance policies listed in the “program(s) of insurance” on endorsement no. 1. The limit can be applied to any of the separate programs of insurance contingent upon terms and conditions of the policy. This policy is constructed as a straight excess form, so the coverage that is outlined on the policies that are directly beneath the FLEX policy for each category of insurance dictate what is being insured.

UNDERLYING COVERAGE.

A. The policy specifies that all of the underlying insurance that is in effect on the effective date of the policy will remain in full effect during the “policy period” and that all person(s) and entity(ies) entitled to coverage will have complied fully with all terms, conditions, and limitations. Included in this condition is the need for insured(s) and entity(ies) to give notice of claim and incident as required by the policy to the underwriter.

B. Failure to maintain the underlying policies throughout the policy period will not trigger the policy any earlier or to any greater degree than would have been had the underlying insurance been correctly maintained. Likewise, failure of the insured(s) or entity(ies) covered by underlying insurance to comply with the terms, conditions, or limitations of that insurance will not trigger the FLEX policy any earlier or to any greater degree than would have been had the underlying insurance been complied with.

If these conditions are not met, there may be a gap in coverage before the FLEX policy is triggered. Some or all of the risk or liability that should have been covered by underlying insurance may be uninsured. This means that, if the underlying insurance lapses or is voided because the insured(s) did not comply with specific terms, the FLEX policy will not drop down to insure the gap. The FLEX policy only will be triggered as if the underlying insurance was maintained as specified on the policy.

C. The underwriter is entitled to amend the policy and charge an additional premium if notified that any underlying insurance policy is amended, or if an underlying policy expires or lapses and is not renewed or replaced.

DEPLETION OF UNDERLYING LIMITS.

There are two situations in which the FLEX policy will apply when the limits of insurance on underlying insurance policies are depleted. They are:

A. When the limits of liability required of the underlying insurance are reduced solely by actual payments related to claims, the FLEX policy will continue to apply as excess insurance over the amount of insurance remaining on the underlying insurance policy.

B. When all the limits of liability required of the underlying insurance are exhausted solely by actual payments related to claims, the FLEX policy will continue as primary insurance with respect to that applicable “program of insurance”.

Both of these situations are subject to the limits of liability and to the other terms, conditions, and endorsements of the policy.

LIMITS OF LIABILITY. Regardless of the number of claims or losses, the number of persons or entities insured, or the number of claimants, the limits of liability remain as follows:

A. The amount specified under item 3(a) of the declarations is the maximum limit of liability and will be the maximum paid under the policy for each and every triggering event. The limit applies per loss or claim and includes defense costs and expenses.

B. The amount specified under item 3(b) of the declarations is the maximum aggregate limit of liability. It is the maximum amount payable under the policy for all loss and damages, including defense costs and expenses, arising from all triggering events.

Payment of any amount under the policy reduces the amount of insurance available during the policy period.

6. GENERAL POLICY CONDITIONS

SETTLEMENTS. The underwriter must approve all settlements. No one else may admit liability for or settle any matter under which coverage is sought unless the underwriter has given prior written permission.

PARTICIPATION. The underwriter has the right to participate in the investigation and/or defense of any matter for which coverage is sought under any “underlying insurance”, even if the limit on the “underlying insurance” has not been exhausted. The underwriter has sole discretion in this area.

SUBROGATION AND RECOVERIES.

A. If payment is made under the policy, the underwriter will be subrogated to all rights of recovery of any person or entity entitled to coverage. The person or entity who is entitled to coverage must execute and deliver to the underwriter all instruments and papers needed to secure the rights of subrogation, as well as doing whatever else is necessary to secure those rights.

B. Amounts that are recovered may result from payment under the FLEX policy and underlying insurance policies. If this happens, the recovered amounts will be apportioned among the FLEX underwriter and those who issued the underlying insurance policies in the inverse order of payment to the extent that actual payments were made. The expenses of any recovery proceedings also will be apportioned in the same ratio as the recoveries.

NOTICE.

A. The named insured is required to give the underwriter the following information as soon as practical, but not more than thirty days after the activity occurs:

1. Notice in writing of any termination, cancellations, amendment to, renewal, or replacement on different terms, of any underlying insurance policy.

2. Notice in writing of additional or return premiums in connection with any underlying insurance policy.

3. Any notices provided to issuers of underlying insurance policies regarding any claim, situation that could give rise to a claim, or other matter for which coverage is sought under the applicable underlying insurance policy.

B. The named insured must give the underwriter notice in writing of any claim, situation, or other matter to the same extent, and within the same time period, as required by the underlying insurance policy that immediately underlies the policy if coverage is sought. This conforms to the requirement that the policy follows the same terms and conditions as the policy immediately under it, subject to limitations contained in the FLEX policy.

ALTERATION. Any policy modifications must be made by endorsement and signed by an authorized employee or representative of the underwriter.

CANCELLATION AND NON-RENEWAL. The provisions relating to cancellation and non-renewal of the policy are as follows:

A. The named insured may cancel the policy at any time by either surrendering the policy or giving written notice as to when the cancellation is to be effective. The underwriter may cancel the policy only for non-payment of premium and only by delivering or sending the written notice of intent to cancel by registered, certified, or other first-class mail to the named insured. The underwriter must deliver or mail the notice of intent to cancel at least twenty days before the effective date of cancellation. The time frame for cancellation may be modified by any law that provides for a different time frame. If such a law exists, the required period for advance notice will equal the minimum period required by the law.

B. The return premium will be calculated using the short-rate method if the policy is canceled by the named insured.

C. The underwriter must provide sixty days written notice to the named insured of its intentions to non-renew the policy.

D. The policy automatically will terminate if any underlying insurance policy is rescinded by agreement or legal process for fraud or other material misrepresentation by the named insured. Such termination of excess coverage under this policy will be done solely with respect to the “program of insurance” that contains the rescinded underlying insurance policy. The excess insurance that applies over the remaining “programs of insurance” will not be affected.

AUTHORIZATION AND NOTICES. The named insured is the sole agent of all person(s) and entity(ies) entitled to coverage under the policy. The named insured will act on their behalf for all matters under the policy. This includes giving and receiving notices and other communication, effecting and accepting endorsements or notices of cancellation, paying premium, and accepting return premium.