New D&O Form Addresses Regulatory and Litigation Trends Outside the United States
Coverage Enhancement Is Part of Chubb's Continued Expansion of Multinational Capabilities
NEW ORLEANS, April 30, 2007 – In response to changes in insurance regulations and more stringent corporate governance requirements worldwide, the Chubb
Group of Insurance Companies has introduced a Difference in Limits/Difference in Conditions (DIL/DIC) Multinational Directors
and Officers Liability form. Available to U.S. corporations that have purchased a Chubb D&O policy, the form can provide
excess coverage and bring local D&O policies up to U.S. coverage levels, where permitted by law.
“As more companies expand their operations outside the United States, their exposure to a directors and officers liability
lawsuit may increase. These companies may find it challenging to comply with the varying insurance laws in each country,”
said Jim Bronner, senior vice president, Chubb & Son, and chief underwriting officer for Chubb Specialty Insurance. “Our
new D&O form supports Chubb’s long-standing commitment to fulfilling multinational customers’ needs in both the traditional
property and casualty as well as specialty insurance arenas.”
Chubb’s 2007 International Risk Survey found that three out of four respondents indicate their company is likely to expand
their operations outside the United States and Canada this year. More than half of the respondents (55%) noted that D&O liability
is becoming a more significant source of risk outside the United States and Canada.
“Many European and Asian countries have established higher standards of corporate governance and regulations that make it
easier to sue a company’s directors and officers. While the current trend in D&O litigation outside the United States is primarily
focused on larger companies, U.S-based companies of every size should proceed with caution when conducting business across
borders,” Bronner said.
From an insurance regulatory standpoint, Bronner explained that some countries, such as Brazil, require foreign companies
that wish to protect their local subsidiary’s directors and officers from litigation to purchase a locally-issued D&O insurance
policy. In addition, Romania is the first country in the European Union to make locally-issued D&O insurance compulsory.
“However, in these instances, a local policy may not provide the breadth of coverage required by many U.S.-based companies,”
Bronner said.
For 125 years, Chubb has offered property and casualty insurance protection around the world. Chubb has operations in 29 countries,
long-standing affiliate relationships with local insurance companies elsewhere and a network of correspondent agents and brokers
to support international insurance needs. In addition to providing locally-admitted policies in virtually every country, Chubb’s
multinational solutions include controlled master programs, exporters packages, foreign voluntary workers compensation, ocean
cargo and political risk insurance.
The member insurers of the Chubb Group of Insurance Companies form a multi-billion dollar organization providing property
and casualty insurance for personal and commercial customers worldwide through 8,500 independent agents and brokers. Chubb's
global network includes branches and affiliates throughout North America, Europe, Latin America, Asia and Australia.
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