Beazley and Hiscox join forces to offer enhanced investigation and inquiry cover for companies under their Directors & Officers insurance policies.
Leading Lloyd's insurers Beazley and Hiscox have joined forces to offer an extended 'investigation and inquiry' insurance, providing companies with enhanced cover for regulatory investigations at a time of heightened regulatory scrutiny.
The enhancement comes at a time when regulatory authorities are placing greater focus on investigations. The number of investigations opened by the US Securities and Exchange Commission's Enforcement Division in 2014 increased by nearly 10% over the previous year. The Division is also building its resources, seeking budgetary approval for 50 new employees in 2016 to reinforce its investigative functions.1
Upon the filing of a securities class action against a company, this enhancement provides cover for costs incurred in response to related informal and formal investigations by, or in conjunction with, the Enforcement Division of the US Securities and Exchange Commission. Cover is also provided, on a coinsurance basis, for costs incurred in responding to the investigation prior to the launch of the securities class action ("look back coverage"), as well as those incurred once the securities action is resolved. This is in contrast to traditional solutions which only cover formal investigations that are concurrent with a securities class action.
In addition to the entity investigation coverage, the policy offers the following protections:
- Plaintiff attorney fees cover in a derivative suit.
- Defence costs for the entity as a nominal defendant in a derivative suit.
- Books and records cover, with a sub-limit.
- Explicit coverage for class certification fees.
- Inquiry cover includes an insured persons attending interviews, meetings and providing documents in connection with (i) requests by court appointed trustees and liquidators and (ii) third party litigation against the company (in relation to non-indemnifiable loss) and (iii) internal investigations (also in relation to non-indemnifiable loss).
- Inquiry cover includes sworn testimonies.
The extension of cover builds on the success of the D&O initiative launched by Beazley and Hiscox in 2014 to offer brokers and clients increased choice and flexibility in the market. Through this the insurers are able to provide materially higher limits and offer additional solutions to complex risks.
Neal Wilkinson, head of Beazley's global management liability team, said: "Regulatory investigations and inquiries are increasing in frequency and intrusiveness. By providing cover before, during and after a shareholder class action, we are significantly increasing the protection afforded to companies confronting the risk of prolonged regulatory scrutiny."
Chris Warrior, head of management liability at Hiscox London Market, said: "Clients look to the Lloyd's market for cover that is precisely tailored to the risks they face. Recognition of costs incurred in responding to a formal or informal investigation, but which otherwise do not trigger a typical D&O policy, has been clearly identified as a primary concern of clients. This product directly responds to this gap in coverage."
For further information, please contact:
Luther Pendragon - Caroline Wagstaff
T +44 (0)20 7618 9158
Group Communications Manager Hiscox
T +44 (0)20 7448 6619 M +44 (0)7824 996370
Source: 1. FY 2015 and 2016 Budget Request by Program reports (www.sec.gov).
Note to editors:
Beazley plc (BEZ.L) is the parent company of specialist insurance businesses with operations in Europe, the US, Latin America, Asia, the Middle East and Australia. Beazley manages six Lloyd's syndicates and, in 2014, underwrote gross premiums worldwide of $2,021.8 million. All Lloyd's syndicates are rated A by A.M. Best.
Beazley's underwriters in the United States focus on writing a range of specialist insurance products. In the admitted market, coverage is provided by Beazley Insurance Company, Inc., an A.M. Best A rated carrier licensed in all 50 states. In the surplus lines market, coverage is provided by the Beazley syndicates at Lloyd's.
Beazley is a market leader in many of its chosen lines, which include professional indemnity, property, marine, reinsurance, accident and life, and political risks and contingency business.
For more information please go to: www.beazley.com
Hiscox, the international specialist insurer, is headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). There are three main underwriting divisions in the Group - Hiscox London Market, Hiscox Re and Hiscox Retail (which includes Hiscox UK and Europe, Hiscox Guernsey, Hiscox USA and subsidiary brand, DirectAsia).
For further information, visit www.hiscoxgroup.com