The D&O insurance market offers a wide range of policy wordings. With some insurers limiting the cover offered and other insurers being generous with wider coverage. It is important for insurance buyers to work with a specialist broker in order to procure the best possible terms.

Sometimes a D&O underwriter will apply an endorsement to exclude ‘professional services`. Whilst the underlying intention of this may be for the D&O underwriter to avoid inadvertent exposure to separate professional indemnity claims (covered separately under a PI policy), the professional services exclusion on a D&O policy can have disastrous consequences if  the exclusion clause is worded too broadly.

Cases that have come to court in the United States highlighted the fact that  a policy containing broad lead-in language can end up excluding management liability relating to the covered business itself. For example, an accountancy practice is providing a ‘professional service`. Whilst the intention of a D&O policy is not to insure the ‘professional indemnity exposure for services given to customers in respect of accountancy services`, if the D&O policy excludes all professional services, it can be interpreted at not covering the accountancy business for any of its work carried out as all of it is ‘professional`.

In order to avoid this, using a specialist D&O broker, policy wordings can be crafted to avoid this ambiguity to ensure Directors and Officers are insured for the management liability exposure regardless of whether the business they work for is a professional services company or not.

W Denis has a long history in arranging Management Liability Insurance for all types of organisations from start ups, to global public companies. For a quotation please contact mark.dutton@wdenis.com or arrange an appointment via Daniel.moss@wdenis.co.uk.