Chubb adds arbitration endorsement to D&O coverage
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In an effort to encourage policyholders to purchase both their primary and Side A directors & officers liability policies with it, the Chubb Insurance Group is adding an endorsement to its Side A coverage offering arbitration.
Tony Galban, Chubb's Warren, New Jersey-based senior vice president and D&O global product manager, said D&O insurance is typically purchased in towers, with the lower portion's coverage applicable to directors and officers and in some cases the entity. On top of that is Side A coverage, which covers directors and officers for nonindemnifiable losses.
Mr. Galban said there has been a tendency in the industry to have the primary and Side A coverages written by two different insurers, with the Side A insurer acting as “second opinion” on coverage matters and claims handling. “The thinking in the brokerage community” is that “I need to separate the two to get the benefit of that second opinion,” said Mr. Galban.
Mr. Galban said under Chubb's “independent coverage review” endorsement, which is being introduced this week, if Chubb is the primary and also writes Side A, if necessary “the customer has the right to a second opinion from a mutually-agreed upon arbiter, and we will adjust the claim in accordance” with his opinion. “We also pay for the arbiter out of our own pocket” he said.
The endorsement, which is offered at no extra cost, eradicates the argument against using the same insurer “and gives the customer a right of appeal,” Mr. Galban said.
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