Category Archives: D&O Insurance (Side A)

Side A D&O Product Insights

RLI has introduced its Enhanced Side A D&O product, a coverage line that is seeing important coverage enhancements.  I recently had the chance to interview RLI’s Chad Berberich, Vice President of its Executive Products Group, about his company’s approach to the coverage, his view of the market, and his experience with the brokerage community’s interest in Side A products.

The Betterley Report has been reviewing Side A D&O policies in its October issue since 2004.  27 different carriers are included in the 2015 Report, which can be viewed at

Rick: Chad, you’ve recently introduced RLI’s new Enhanced Side A D&O policy to the market.  How is it different from your existing product?

Chad:  The new Side A D&O policy is a wholesale rewrite of the prior policy form, so the changes are pretty substantive. Changes were made to incorporate many things that were commonly endorsed on the old form into the body of the new policy. There were also a number of coverage enhancements made, such as including:

  • Two policy limit reinstatements
  • Deleting all the exclusions except the conduct exclusion (and narrowing that exclusion), and
  • Defining and providing coverage for a Cyber Claim

Rick: Were these changes driven by client/broker requests?

Chad:  Yes, the changes were driven by both client and broker requests, along with a desire to have a very competitive policy in the marketplace. Executives today are operating in a dynamic and complex business environment where the risks they face are constantly changing. We strive to anticipate the changing needs of our customers and modify existing products, or develop new products, to ensure we are providing them with the most comprehensive protection possible. The new Side A D&O Policy and new Representations and Warranties Liability Policy that we just announced are two recent examples of how we are shaping our products and insurance solutions to better serve the executive suite.

Rick: I see the market for Side A as primarily public companies, which is largely saturated.  Do you agree with my observation?

Chad:  Historically it has been public companies that buy Side A D&O policies, but there continues to be opportunity for growth in other market segments, such as nonprofits and larger private companies. And yes, I would agree that there is plenty of capacity.

Rick: I’ve been saying for years ‘why aren’t large not-for-profits buying Side A?’  It seems carriers agree with me, but I have yet to hear a good reason from the brokers that serve that market.  What do you think are the reasons?

Chad:  We’ve actually seen larger nonprofits and larger private companies start to buy Side A – those classes have been a strong source of new business for us over the last year or so. I think brokers have long promoted Side A to their larger private and nonprofit clients and the coverage has become more widely known and better understood than it was a few years ago. With increased awareness about the need for Side A coverage in this market, we’re starting to see more interested buyers.

Rick: What will it take for large not-for-profits to start buying Side A?

Chad:  We’re already seeing more buyers in the not-for-profit space. As brokers focus more on talking about the product with those customers and helping educate them on the unique risks they face and how Side A coverage can reduce their exposure, sales of the product will increase.

Demand would also increase if there was any significant loss activity where a given nonprofit organization was unable to indemnify the directors or officers. Given that board members on large nonprofit organizations are often prominent members of the community and often have substantial personal assets, they are uniquely exposed when they accept a position on the board of a large nonprofit organization.

Rick: Do you find that most Side A policies are largely sold by a relatively small number of brokers?

Chad:  I think any broker that sells D&O is selling Side A.

Rick: Do you find the non-global and regional brokers knowledgeable about Side A?

Chad:  I do – the non-global and regional brokers are savvy and hungry. They know the product and are definitely selling Side A.

Rick: Do you think that Side A will ever be bought in quantity by non-public insureds (i.e., large private companies and not-for-profits)?

Chad: I don’t think we will see the same limits purchased by nonprofits and private companies compared to public companies, but do believe that those nonprofits and private companies will buy more policies as time goes on and their awareness and understanding about the need for Side A coverage continues to grow.

Rick: Thank you, Chad.  I appreciate your sharing your inside knowledge of the Side A marketplace and the opportunity to highlight the changes in your new policy.

About Chad Berberich and the RLI Executive Products Group:

Chad Berberich is Vice President of the RLI Executive Products Group, a division of RLI that offers a comprehensive portfolio of professional liability insurance coverages for the Executive Suite. To learn more about the RLI Executive Products Group and its Side A DIC D&O liability policy, visit or contact Chad Berberich at (972) 677-2116 or


Specialty Insurance Year End Wrap-up Webinar 12/12 at 11 AM by Advisen

Please forgive me for a bit of self-promotion, but this program should be really good; I already learned a lot from our panelists’ conference call.

On Thursday morning, December 12 at 11 AM (eastern time), I will be on a panel moderated by Advisen’s David Bradford to review the trends and developments of 2013 in Specialty Lines insurance. The panel of experts will also provide insight into 2014 & beyond. This free, one-hour webinar is sponsored by OneBeacon Professional Insurance; registration is here.

The panel includes:

  • Paul Romano, President, OneBeacon Professional Insurance
  • David Lewison, National Practice Leader, AmWINS
  • Rick Betterley, President, Betterley Risk Consultants
  • David Bradford, President, Research & Editorial division, Advisen (moderator)

The economy continued to improve in 2013, which generally benefitted the insurance market. For specialty insurers, however, the year posed a number of challenges. Healthcare reform continued to reshape the risk landscape of hospitals and other healthcare organizations. Lawyers continued to feel the fallout of the credit crisis and recession as claims activity remained above historical averages. Network security challenges further evolved in the endless cat-and-mouse game between cyber criminals and system security experts.

This webinar will review the trends and developments of 2013 in “Specialty Lines” insurance. Our panel of experts also will provide their insights into the factors that will influence the market in 2014 and beyond.

Hope you can join us!

Side A D&O – My thoughts on the marketplace and especially the larger not-for-profit sector

Our October issue on Side A D&O products continues to be widely read as carriers continue to innovate.  But I am still pursuing the idea that larger not-for-profits don’t seem to have the interest in it that I (and many others) think they should.

In that issue, I speculated on the impact of the Affordable Care Act and the strains it is causing health care systems.  We are seeing some signs of increasing purchase of Side A by those systems, but it is far from pervasive.  That discussion is on page 3 of the issue.  Attorney Joe Monteleone and I also wrote about the topic in July’s edition of Trustee Magazine (published by the American Hospital Association).

WRINTV asked me to comment on the Side A market and in particular the interest on the part of health care systems; the interview is here.  The interview provides a bit more color to the topic.

This topic deserves more discussion than it is getting  – why isn’t it?

Side A D&O – Snips From Our 2012 Report

This week, we published the 2012 version of Side A D&O Insurance Market Survey, which covers 26 carriers offering this important additional protection for Board members.  The Executive Summary and the full Report can be found at IRMI.

In our research, we found:

* A continuing saturation of the market for large publicly-traded insureds

* The opportunity for private company and large not-for-profit market expansion is still unrealized

* Substantial limits of coverage are being purchased (the Survey includes information about the range of limits carried by insureds)

* Rates are edging up, but not dramatically (in line with most other commercial lines); current premiums (U.S.-based purchasers) of $700 million-$1 billion

I expect to see this product as having more appeal than to just the publicly traded insureds, but to date, it seems I am ahead of the market.  Private companies and large not-for-profits seem disinterested in the benefits of the product.  Is this because they don’t know it exists?  Don’t understand it?  Think they don’t need it?

Many D&O policies are sold (and high limits are purchased) because the Board wants it, even if they don’t particularly know much about the coverage and exposure.  If this is true – why aren’t more Boards demanding Side A coverage?

Snips from our Private Company Management Liability Insurance Market Survey 2011

We are pleased to let you know that our Private Company Management Liability survey was posted recently at  This Report reviews bundled products that can included D&O, EPLI, Fiduciary Liability, and other executive liability products.  The target market is generally middle market and smaller insureds.

We have selected twenty-three carriers for this year’s Survey, up from twenty in 2010. Newly added carriers include Argo and Zurich; Starr is back after a one year absence.

2011 looks to be similar to 2010, but with a definite firming of rates indicated as the year develops.  While we do not expect any significant increase in rates, discounts are disappearing, and small (5% or so) increases are more common.

The volume of business (gross written premium) is rising a bit, with most carriers reporting total premium growth in the 0-10% range; markets reporting flat or down premiums tend to be the smaller companies, as continuing softness in rates combined with cutbacks in coverage made for an environment in which a carrier was happy just to get as much premium as they did from the expiring policy.  We see support, though, for premiums to resume their climb as insureds recover from the recession.

Based on confidential conversations, we found:

  • Premium growth (2011 projected versus 2010) is rising slightly, accelerating as we get further into the year.
  • Rates are flat or up 5 to 10 percent for good insureds, a bit more (10 to 20 percent?) for the less attractive insureds
  • Deductibles are flat
  • Reinsurance support is stable.

Although carriers continue to broaden the types of coverages they offer the middle market, we believe they are missing a golden opportunity by not offering more coverage options.

Adding more coverage options can be a successful product strategy because MLI policies are an easy sell to insureds and their brokers – most insureds need at least a couple of the core coverages (EPL and Fiduciary).  Adding additional coverages to an existing policy is an easier buy (or sell?) for many insureds, who find it easier to add an option than to buy an entirely new policy.

Many insureds and brokers have told us over the years that they can get internal support for an added coverage option that would have encountered resistance as a new policy purchase.  This was especially true during the recent soft market, when premium reductions freed up budget for additional insurance purchases.

More about lines of coverage soon (or, read the full Report at


Side A D&O – snips from October’s Report

Just posted our October review of Side A D&O Liability insurance products and market.  This coverage provides protection over and above that included in standard D&O policies, and protects board members against the risk that certain claims under the D&O policy won’t be paid.

Here are a few of the things we found this year:

  • More carriers – we increased coverage to 20 carriers, adding W.R. Berkley, Endurance, Hudson, and Old Republic
  • Soft-ish rates – plenty of competition means carriers can’t easily raise rates, despite potentially rising claims from the Great Recession and innovative coverage disputes in the D&O market
  • BUT – we think there might be a small upward tick in rates as those claims are recognized, perhaps later in 2011
  • New policy forms from established Side A carriers as insurers fine tune coverage
  • No sign yet that our expectations for growth in the large private company and not-for-profit (universities and health care systems) are being realized, but its early yet


Side A D&O Products from Endurance Risk Solutions

Joe O’Donnell of Endurance Risk Solutions updated me on their Side A product, which is open to a broad range of commercial insureds, the exception being financial institutions.  Capacity is $25 million and can be written on an admitted basis in most of the 50 states. They also write Lead Side A DIC, Excess DIC, as well as Independent Director Liability coverage.

Thank you, Joe.