Could you throw some lights on how to decide coverage limit while buying D&O policy What is the optimum limit for my company/or any institutions Is there any mathematical formula for the same Is there any guidelines
Hey Yashas - sorry for the delayed answer, I hadn't seen your question before. It's a good one too. Limits of coverage in my opinion are based on two things: 1. benchmarking > what is your peer group typically buying? Benchmarking reports will tell you what limits of coverage firms in your industry in a similar revenue size band are commonly buying. It might say that 60% of similar firms are buying $1M to $3M in limits, and so forth...... #2. is budget - you need to be realistic on what you can afford to buy which is why I recommend asking for options rather than just looking at proposals for $1M in limits. Look at $2M, $3M, etc. Hope that helps. If you want to reach out to me directly, here's my email: gbcoyle (@) thecoylegroup.com thanks
You also mentioned that ransomwere could also be covered under D&O My institution buys cyber and D&O policies and ransomwere coverage is brought separately in cyber policy So could I drop ransomwere clause from the cyber policy as D&O covers the same anyway
Yashas - Thanks for your questions. How to decide what limits to purchase is more of an art than science. There's no exact mathematical formula, instead, the most common approach we use is to benchmark the decision. We go to a database and query your industry and revenue size and see what your peer group is buying. The resulting report would tell us the common limits purchased by percentage in the peer group. For example, 40% of the group purchases $2m to $3m in limits, 18% purchase $4m-$6m, and so forth. Regarding the question on cyber, my comment is that in some management policy forms you can add other policies such as cyber to it as a package. This is commonly done in smaller firms, and I don't recommend adding Cyber due to the need for a broad cyber policy with its own limits of coverage. D&O does not automatically include Cyber or ransomware, those are the domain of a cyber policy. If you have any other questions, let me know - gbcoyle@thecoylegroup.com Thanks!
Could you throw some lights on how to decide coverage limit while buying D&O policy
What is the optimum limit for my company/or any institutions
Is there any mathematical formula for the same
Is there any guidelines
Hey Yashas - sorry for the delayed answer, I hadn't seen your question before. It's a good one too. Limits of coverage in my opinion are based on two things: 1. benchmarking > what is your peer group typically buying? Benchmarking reports will tell you what limits of coverage firms in your industry in a similar revenue size band are commonly buying. It might say that 60% of similar firms are buying $1M to $3M in limits, and so forth...... #2. is budget - you need to be realistic on what you can afford to buy which is why I recommend asking for options rather than just looking at proposals for $1M in limits. Look at $2M, $3M, etc.
Hope that helps. If you want to reach out to me directly, here's my email: gbcoyle (@) thecoylegroup.com thanks
You also mentioned that ransomwere could also be covered under D&O
My institution buys cyber and D&O policies and ransomwere coverage is brought separately in cyber policy
So could I drop ransomwere clause from the cyber policy as D&O covers the same anyway
Yashas - Thanks for your questions. How to decide what limits to purchase is more of an art than science. There's no exact mathematical formula, instead, the most common approach we use is to benchmark the decision. We go to a database and query your industry and revenue size and see what your peer group is buying. The resulting report would tell us the common limits purchased by percentage in the peer group. For example, 40% of the group purchases $2m to $3m in limits, 18% purchase $4m-$6m, and so forth. Regarding the question on cyber, my comment is that in some management policy forms you can add other policies such as cyber to it as a package. This is commonly done in smaller firms, and I don't recommend adding Cyber due to the need for a broad cyber policy with its own limits of coverage. D&O does not automatically include Cyber or ransomware, those are the domain of a cyber policy. If you have any other questions, let me know - gbcoyle@thecoylegroup.com Thanks!
Great (succinct!) explanation Gordon.
Thank you Paul!