According to experts, most New Year’s resolutions fail because sweeping change is difficult. Rather, the best results come from taking small steps. Here are five small steps to take to make sure your directors’ and officers’ (D&O) coverage can tackle potential cyber risks.
- Review your coverage program from last year. Endorsements, policy provisions, and pricing change from year to year to address hot market issues, such as claims regarding data security and privacy incidents. If operating globally, keep an eye out for coverage for potential crises.
- In addition to the primary policy, the company should review any excess and any “Side A”-only or difference-in-conditions, or “DIC,” policies. Reviewing how the company’s D&O program works as a whole is well worth the effort.
- Analyze whether claims that may be excluded or only partially covered under a D&O policy may be covered elsewhere. For example, how will the company’s cyber, CGL, or property coverage interact with its D&O coverage in the event of a data breach or privacy incident?
- Determine your company’s highest exposure activities for 2020 and map out how coverage may (or may not) respond.
- Pay close attention to attorney–client privilege issues in the application or renewal process. Policy applications, warranty statements, renewal information, underwriting meetings, and communications with insurance brokers and others can be potentially sensitive and impactful in the event of a claim. Managing the process and information flow with an eye toward privilege can ensure greater protection.