ACE European Group (ACE), a primary underwriter of directors and officers (D&O) insurance in the London market, is taking a lead in the D&O market by providing greater clarity in the extent of cover relating to extradition.
The recent publicity surrounding extradition of directors from UK companies to the US has created confusion about the scope of D&O cover. Buyers and brokers appear unsure as to whether or not the costs of defending and appealing extradition proceedings are covered. The issue is unlikely to go away as there is a likelihood of further extradition proceedings, for example in relation to price fixing.
Joe Fernandez, D&O Product Manager for ACE, said: “Our D&O policy wording has always catered for the defence and appeal costs associated with extradition proceedings. It’s important that the market avoids making the matter more complicated by continually debating whether D&O will provide protection in these circumstances. In our view it does, and directors should not be left feeling confused.”
In order to clarify this, and as a response to enquiries from brokers, ACE has issued a policy endorsement which clearly and explicitly states that extradition proceedings are included in order to remove any uncertainty.
Joe Fernandez continued: “The impact of the Nat West three case has caused a lot of concern amongst those involved in the D&O market. The fundamentals of the cover are to provide directors with peace of mind that their liabilities are covered. Our D&O policy offers an extensive range of protection and we believe that the costs relating to defending and appealing extradition proceedings should constitute a valid claim.”