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Specialty Liability



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As a doctor, accountant, architect, software consultant or engineer, you are often responsible for projects that have colossal Special Liability Insuranceconsequences. It is imperative that you have adequate insurance to make sure you are protected. At L.D. Dermody we have access to some of the best Professional Liability markets in Canada and we’ll make sure that you get the policy that is right for you.

We understand the issues and challenges organizations face when it comes to director and officer liability and have partnered with well-respected insurance carriers to deliver a program that will appropriately protect the personal assets of your Directors and Officers. We insist that the insurer understands your business and are able to underwrite the business for the long term, as well as having the ability to settle any complex claims that come your way.


 

Errors and Omissions
Professional liability insurance and errors and omissions insurance (E&O) are essentially the same thing. People use these terms interchangeably, and they are referring to the same basic product. E&O Insurance covers you and your company for situations that aren’t covered by your commercial general liability policy. Your commercial general liability policy covers you for bodily injury or property damage that you cause (or are alleged to have caused), but not pure financial losses. In addition, commercial general liability policies often exclude claims arising out of your professional services. An E&O policy fills these gaps and protects you against claims for financial loss, or bodily injury and property damage claims resulting from the rendering of professional services for a particular industry. If you're advising your clients, making recommendations or providing services to your clients that could cause them a financial loss then you likely need this coverage. E&O insurance is especially important for businesses like IT/technology consultants, business consultants and marketing consultants for whom incorrect advice or a failure to perform professional services could lead to a lawsuit. Even if you haven’t made a mistake, you can still be sued.

Omitting this coverage could be costly 

An error, an omission, or an instance of unintentional negligence could have dire consequences for are held liable for damages.

Here are some loss examples that show where Professional Liability coverage could help:

Property damage

An interior designer develops the layout of a restaurant for a client that results in a fire risk. A property insurer’s subrogated claim, following a fire arising from the design error, leads to damages against the designer.     

 

Financial suit

An accountant responsible for preparing a company’s financial statements incorrectly quantifies the firm’s value. After the business is sold, the new owners realize that the value does not correspond to what was declared and sue the accountant.

Bodily injury

A nurse working for a home care placement agency administers an incorrect dose of medication to a patient under her care. This
patient sues the nurse for causing bodily harm

Directors and Officers

D&O policies protect Directors and Officers when they act honestly and in good faith while attempting to act in the best interests of their organization. Being the director or an officer of a company has an enormous amount of responsibility attached to it. This responsibility is more extensive than what lower level employees are exposed to and so directors and officers need their own protection. They are required to act in good faith and in the best interest of their organization. They make decisions that can affect all of the livelihoods of their workers and shareholders – and, should something go wrong are accountable.

The Essentials

Directors and officers can find themselves in the unenviable position of incurring personal financial liability when something goes wrong. They may be liable for:

  • Failure to act as stated under a statute. For example, if a statute requires directors to file a report or maintain certain records, and these reports and records are not maintained, then the director may be liable for an offence under that statute.
  • Non-compliance of the organization with a statute. For example, directors may be liable for mismanagement, financial losses, wrongful dismissal, employee discrimination or failure to remediate environmental damage.
  • Tax Legislation. Personal liability arises for directors as the result of a variety of offences under federal and provincial tax statues.

Directors and Officers Liability for Public Companies

Often the greatest cost in dealing with an allegation against a corporation, or its directors or officers, is the legal cost of defending the action. In many circumstances, directors’ acts are indemnified by their corporations as written in their by-laws. However, in the case of insolvency of a corporation or allegations of wrongdoing by a director, legal costs may not be covered.

Special Liability InsuranceDirectors and Officers Liability for Private Companies

While private companies may not have the same exposure as publicly traded companies, they are exposed to securities litigation, allegations of misrepresentation by creditors or customers, conflicts of interest and/or other breaches of fiduciary duty.

Directors and Officers Liability for Non-profit Organizations

The responsibilities of individuals serving on a non-profit board of directors are similar to those of directors of for-profit companies. However, non-profit organizations have limited resources to indemnify directors and officers or respond to expensive litigation, settlements or damage awards. Where no indemnification or only partial indemnification is available, the personal assets of directors and officers are at risk, as well as those of the entity itself. D&O liability coverage is a critical component of the overall insurance protection package for non-profit organizations.

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