Willis Launches DARCSTAR™: The First All Risk Cover for Company Directors

LONDON--(BUSINESS WIRE)-- As the regulatory environment becomes increasingly challenging in the UK, Company directors and officers could be left having to pay expensive legal bills from a raft of official investigations and enquiries while their companies and insurers dispute whose responsibility it is to indemnify them. In response, FINEX Global, part of Willis Group (NYSE: WSH), the global insurance broker, today unveiled a groundbreaking new product, Directors’ All Risk Cover (DARCSTAR™), which eradicates the indemnification uncertainties in Directors & Officers (D&O) insurance.

Developed by Willis’ Financial, Executive Risk and Professional Liability business in association with a panel of highly rated insurers led by Allianz, QBE and XL, DARCSTAR™ cuts through the complexities of traditional D&O cover to advance all directors’ costs in the event of an allocation dispute. In just eight pages, less than half the length of a standard D&O policy, it delivers broad and relevant cover in an easy to understand policy that offers directors and officers significantly enhanced protection.

DARCSTAR™ is the brainchild of Executive Director, Francis Kean, who, before joining Willis, worked for 25 years as a litigation lawyer specialising in D&O, professional indemnity and financial institutions liability in the London insurance market.

Explaining the rationale behind the revolutionary new product, Kean said, “In traditional D&O insurance policies, insurers expect and routinely require companies to indemnify their directors wherever possible before insurers’ obligation to pay is triggered. In practice this means that directors and officers may be left without cover whilst insurers and companies argue over whether a particular loss is or is not indemnifiable. Worse still, a gap in cover can arise where a company may be legally permitted to indemnify but chooses not to do so.”

The unique features of DARCSTAR™ include:

• One insuring clause that provides direct access for the directors to insurers, as opposed to three D&O cover clauses.
• D&O cover is on a broad “all risks” basis which means that the risk is covered unless excluded. This is different to conventional D&O policies which list several pages of insured perils.
• A guarantee from the insurers that they will not seek recovery from the policyholder for indemnifiable loss.
• No compulsory deductibles or retentions other than with respect to securities claims.
• Clear triggers for investigation costs cover across a broad spectrum of external and internal investigations and enquiries.

"We welcome a product that truly focuses on the important beneficiaries of D&O insurance – the directors and officers themselves. If you want your D&O insurance to do what it says it does – protect your key management – DARCSTAR™ is an excellent solution," said Suresh Ellawala, D&O Product Manager, QBE.

“Allianz is delighted to support DARCSTAR™ in partnership with Willis. As part of Allianz's commitment to providing our clients with the high level financial security and service they deserve, we believe this innovative solution delivers real value to businesses as part of their insurance and financial service needs,” said Gary J Everson, Head of Financial Lines, Allianz Global Corporate & Specialty.

“By removing the complexities of indemnifiable and non-indemnifiable loss, DARCSTAR™ is the most significant shift in D&O coverage for many years. It is designed to promote more transparent claims handling and to provide our clients with a clearer understanding of the insurance they are buying,” concluded Kean.

Willis Group Holdings plc is a leading global insurance broker. Through its subsidiaries, Willis develops and delivers professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries, with a global team of approximately 17,000 employees serving clients in virtually every part of the world. Additional information on Willis may be found at www.willis.com.

Willis Group Holdings
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Source: Willis Group Holdings plc