As reported by Dan Reynolds in the August 2009 edition of Risk & Insurance,
To hear Peter Taffae tell it, he started to get a hunch a little over a year ago that big changes were coming to companies in the insurance sector. Red flags were beginning to go up around American International Group Inc. and some of the sharper people in finance felt that an economic crisis was coming to some of the nation's most important underwriters.
That's when it hit Taffae, a former underwriter himself and current managing director for the Los Angeles-based wholesale broker ExecutivePerils, Inc. Why not give insureds a little more assurance in the realm of their liability coverage?
What Taffae came up with was what he calls the "supercontinuity option." For the price of pennies on the overall D&O premium for the relevant layer, the insured gets the option of switching D&O coverage to a backup carrier if the primary carrier on the insured's first D&O layer suffers a crippling ratings downgrade.
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What a great idea. I bet that not a lot of companies or their brokers are thinking in this manner. I have no idea of what the true costs may be for this protection but I bet that the people who your company wants to get and retain as directors and officers will surely sleep a lot better at night knowing that this double protection is in place.
