Ever since the housing bubble burst of 2008, drastic changes continue to be made in the real estate world. Specifically, directors & officers (D&O) professional liability carriers are still feeling the consequences of decisions made by the financial institutions they’ve insured, which is why changes are underway in D&O insurance. The staff American Tri-Star Chula Vista discusses some of the changes likely to come in directors and officers insurance.
Higher Policy Premiums
The housing bubble burst had a major ripple effect throughout the real estate world. One consequence of the burst is that financial institutions like real estate agencies have had to pay millions in legal fees and settlements. These costs are now being reflected in significantly higher policy premiums, which sometimes go through the roof. The financial institutions that are still standing continue to try to compensate for their losses.
Limits on Classifications
D&O policies used to be written to cover all decisions made by the board regarding company operations. Current policies are being issued with classification limitations, which used to only be reserved for other types of liability insurance policies. This change means insurers are now much more specific with what they will cover.
Even if there are no classification limitations written into a Chula Vista directors and officers insurance policy, the insurer still might decide to add in exclusions that limit what they’re willing to cover. There might be coverage gaps, which means it’s important to pay attention to the terms and conditions. It’s admittedly become much more crucial for financial institutions to make sure they have all their insurance bases covered.
Warnings Become Policies
One more major change is that the insured’s signed application will now be included as a part of a D&O policy’s forms, which means the warranty statement at the bottom of each application is now not just a warning statement, but a part of the terms and conditions of the policy. This could possibly change the way legal disputes are handled.
If you’d like to learn more about D&O insurance, get in touch with the insurance experts at American Tri-Star. In addition to commercial insurance, we are also a leading provider of home, health, car, and motorhome insurance Chula Vista residents trust. Give us a call today at 619-827-0522 and one of our knowledgeable representatives would be happy to answer your questions and provide a free quote.