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Zurich North America
International Towers by Zurich
A rise in lawsuits against directors and officers of companies in the United States and overseas over the past 10 years has created issues for multinational organizations.
The surge in litigation has meant that companies whose D&O liability insurance programs provide a single coverage limit for their U.S. and foreign exposures are vulnerable, said Brian Zink, senior vice president, head of management liability, at Zurich North America. If a large claim in the U.S. erodes a company’s policy limits, directors and officers in other countries are left without protection.
“In the 2010 time frame, you could count on one hand how many countries had D&O claims,” Mr. Zink said. “Now, you can count on one hand how many countries do not have D&O claims.”
Around that time one-third of Zurich’s primary customers purchased some type of international coverage. “Today that number has increased to about 85%,” he said.
To obtain a separate D&O limit for foreign exposures, U.S.-domiciled companies had to access the London Market for multinational coverage. That required a broker in the United Kingdom, which lengthened the time needed to obtain policies and could mean higher costs.
Zurich identified an opportunity to provide an insurance option for its U.S.-based multinational clients. In late 2021 the company launched International Towers by Zurich, a standalone D&O limit that excludes U.S. claims, protecting foreign limits from a U.S. loss. Operating like a traditional international program, local policies are included to provide admitted, licensed coverage in each country where the policyholder does business.
ITZ also addresses a related issue. “In the past few years, with the rise in claims, you were starting to see the carriers reduce the limits,” Mr. Zink said. “This created a demand internationally for more capacity.”
Zurich offers the coverage even if it is not on the U.S. contract, Mr. Zink said. “It’s another avenue to capacity, to solve the insurance needs of our customers.”
Having coverage from the U.S. “greatly simplifies things for organizations,” he said. “They don’t have to deal with yet another broker, and if they do have a claim, they can go to their U.S. team as a liaison, even if the claim is overseas.”