Additional Limits
The new policy contains an option to purchase an additional limit applicable only to officers, similar to the additional limit option in the CODA Policy for Independent Directors. The additional limit is excess of all other policies specifically excess of the CODA policy, subject to the DIC features of the CODA policy. A priority of payment provision maximizes the total amount payable under the CODA policy in the event covered Loss is subject to both the standard limit and the additional limit. Insureds can now purchase just the Independent Director limit option, just the officer limit option, or both options.
Separate Retired Director Coverage
CODA now offers a separate multi-year Retired Director policy, which affords run-off coverage for all former Independent Directors of the Company. The new standard CODA policy includes a priority of payment provision which maximizes the total amount payable by CODA under the standard CODA policy and the Retired Director policy in the event Loss is covered under both CODA policies.
DIC Trigger
DIC coverage applies if underlying insurer fails to pay (not just refuses to pay) within 60 days after Insured Persons request payment.
Non-Indemnification Trigger
Loss is not indemnified by the Company for purposes of the Policy if the Company fails to indemnify (not just refuses to indemnify) within 60 days after Insureds request payment.
Witness Interviews
The definition of Claim in the new Policy is also amended to include a request by a regulatory, administrative, governmental or similar authority to interview or depose an Insured, even if no demand, proceeding or investigation has been made against the Insured.
Claim Includes Notice of Circumstance
"Claim" includes a notice to CODA of a potential Claim (i.e., Policy covers Loss incurred by Insured Persons relating to notice of circumstances).
For-Profit Outside Positions
The definition of Outside Entity is amended in the new Policy to include not only not-for-profit organizations, but also all for-profit organizations, but only with respect to a director, CEO, president, COO, CFO or EVP of the Company serving in an outside position with the for-profit organization.
Conduct Exclusions
The conduct exclusion is amended in the new policy in two respects. First, the reference to an arbitration pursuant to Clause 5 of the Policy is deleted, and instead the exclusion is triggered by (i) a final judgment or adjudication in any proceeding other than a proceeding initiated by CODA or (ii) a guilty plea or other written admission under oath by the Insured. This change eliminates the ability of CODA to instigate an arbitration which could be used to trigger the conduct exclusion. Second, the new language adds a carve-out to the exclusion which allows a majority of disinterested directors of the Parent Company to waive the conduct exclusion for an Insured who enters a guilty plea or other written admission under oath.
Bodily Injury/Property Damage
The exclusion does not apply to (i) pollution claims, (ii) securities claims, or (iii) Independent Directors.
Insured v. Insured Exclusion
The exclusion only applies to Claims by or on behalf of the Company (not Insured Persons) and only if two or more executives voluntarily approve or assist in bringing the Claim. The exclusion does not apply to (i) Defense Costs, (ii) Claims outside the U.S. or Canada, (iii) Claims made after the Parent Company's bankruptcy or change in control, (iv) Claims by bankruptcy trustee, (v) whistleblower Claims, or (vi) Claims which independent legal counsel opines must be brought to fulfill the Insureds' fiduciary duties.
Limited Number of Exclusions
The Policy does not contain a pollution, ERISA, prior notice, other insurance or P&P litigation exclusion.
Follow Form Coverage
The Policy generally follows any broader coverage in any Underlying Insurance.
Punitive and Multiple Damages
The Policy includes coverage for punitive and multiple damages if insurable under U.K. law.
No Defense Cost Consent Required
The Insureds are not required to obtain CODA's consent to incur Defense Costs.
Late Notice of Claim
CODA must prove it was prejudiced by a late notice of Claim in order to deny coverage based on that late notice.
Subrogation
CODA has no subrogation rights against an Insured Person unless the conduct exclusion applies to the Insured Person.
Application Definition
The new policy deletes from the definition of Application "supplementary information" since that could include more information than is otherwise expressly incorporated into the definition.
Extradition Costs
The definition of Claim in the new policy includes an official request for extradition of an Insured, thereby expressly affording coverage for defense costs incurred as a result of such an extradition.
Defense Cost
The new Policy confirms in the definition of Defense Costs that coverage includes (i) expenses incurred by Insureds at CODA's request to assist CODA in investigating the Claim, and (ii) costs assessed against the Insured in the Claim.
Section 11 Loss Insurability
The definition of Loss is amended in the new Policy to expressly recognize that Loss incurred by Insureds due to actual or alleged violations of Section 11 or 12 of the Securities Act of 1933 will not be treated by CODA as uninsurable loss.
Delete Other Insurance and Prior Notice Exclusions
The new Policy deletes the "other insurance" and the "prior notice" exclusions, although the "Other Insurance" provision in the Policy continues to state coverage under the Policy is excess of other valid and collectable insurance.
Notice of Circumstances
Circumstances identified in a valid notice of circumstances need not be "likely" to give rise to a future claim, but must only be "reasonably expected" to give rise to a future claim.
Penalties
Certain penalties under the Foreign Corrupt Practices Act are expressly included as Loss.
Arbitration
An arbitration involving a coverage dispute may occur in London, Bermuda, Toronto or Vancouver, at the election of the Insureds.
The information contained in this document is intended to provide only a general description of ACE Bermuda’s products. For terms and conditions of coverage, please refer to the specific policy wording. For more information contact your broker.
If you are a US-based company, broker or agent please note that ACE Bermuda’s insurance products are only available through non US-based brokers.