Page 7 - McGowan Program Administrators

TO TENDER,
OR NOT TO TENDER?
THAT IS THE QUESTION.
Directors & Officers Liablity – Claims made & reported policy
If you are asking the question – Tender! Report to the carrier. [Caveat: a carrier is not obligated to pay any defense fees & costs before a matter is reported]
Do the allegations constitute a “Claim”?
Definition of a Claim
Not all definitions of claims are created equal. Some are very narrow such as “the service of a suit”.
1. Written demand for monetary damages or non-monetary relief (Caveat: was it written?)
2. Civil proceeding
3. Criminal proceeding
4. Formal civil administrative or
regulatory proceeding
...against an insured for a wrongful act!
If there are facts or circumstances
that have not matured into a “claim”, but give rise to a potential claim, submit notice of those facts and circumstances to the carrier so that if it later matures into a “claim” then most policies will “relate” back to the policy when “the facts or circumstances were reported to the carriers”.
If it is a “claim”, then what?
If it is not a claim, are
the allegations facts or circumstances that could give rise to a “claim”?
Most D&O policies are “claims made and reported” policies requiring that if a “claim” is received by the “insured” or the Insured is aware of the “claim” it must be “reported” to the carrier within the “policy period” or the “discovery period”, if applicable.
Claim often means...