How do you attract the best professionals to become executives at your business? Offering a competitive pay package may be the first thing on your mind. However, when looking to find the top business person to take an organisation to the next level, offering them protection is a real consideration.
One global insurer certainly thinks so, saying that institutions need directors and officers insurance “more than ever”, making it a great time to talk about the cover a business offers its executive talent.
The Australasian Financial Institutions Manager for AIG Financial Lines, Liliana Uhrik, said financial institutions can find themselves underprepared and lacking the level of cover required for some business leaders.
“After discussion with our financial institution clients and their advisers, and in light of our extensive analysis, we recognised that financial institutions now, more than ever, need comprehensive insurance to attract, retain and protect their business leaders,” Ms Uhrik explained.
“In the wake of the deluge of claims arising from the global financial crisis, the Australian insurance market has been reticent to provide the breadth of cover required in this difficult legal environment for this sector.”
In particular, AIG outlined holes in some business insurance packages, such as cover for extortion – and even kidnap and ransom. While this may not be applicable for all, it does demonstrate the many variables that go into creating bespoke insurance cover.
What is directors and officers insurance?
Directors and officers (D&O) insurance is designed to protect natural persons, other than legal ones (business or government entities). This means it offers cover for directors, executives, secretaries and other employees open for certain liability claims and secures their personal assets.
D&O protects employees from a range risks to them as a person of responsibility – such as error or mismanagement – and can be a useful policy to attract the best business talent.
As Ms Uhrik concluded, the new, more stringent cover AIG have offered is “a recognition of these needs, and the importance [of] directors and officers liability insurance”.