FINANCIAL LINES PACKAGE FOR LIMITED LIABILITY PARTNERSHIPS BROKER FACTSHEET ForeFront Plus for LLPs is Chubb’s specialist package solution for Limited Liability Partnerships (“LLPs”). LLP’s and their directors, officers and members routinely face exposures from parts of the Companies Act, Insolvency Act and Company Directors Disqualification Act. ForeFront Plus is acknowledged by many brokers as the leading financial lines package policy and it provides six key sections of cover, each with its own stand-alone limit. When combined with Chubb’s enviable claims handling reputation, ForeFront Plus for LLPs provides a first class one-stop solution. Why do your clients need package polices? • Directors, officers and members can find themselves involved in complex, timeconsuming and expensive proceedings • LLPs are a separate legal entity, so the need for protection from liability goes beyond the scope of cover for individuals only • Arranging multiple insurance policies can take up management time and become more complicated and costly than implementing a package solution Policy Offering A comprehensive package policy providing cover for: • Directors and officers liability • Pension scheme and benefit plan liability • Employment practices liability • Employee crime • Corporate legal liability • Kidnap and extortion expenses Limits Each section has its own standalone limit: • Directors and officers liability - up to £15,000,000 (flexible options available) • Employment practices liability - up to £10,000,000 • Corporate legal liability - up to £5,000,000 • Pension scheme and benefit plan liability - up to £15,000,000 (flexible options available) • Employee crime - up to £15,000,000 • Kidnap and extortion expenses - up to £15,000,000 Appetite We like to insure We are cautious of 4 Small to medium sized organisations 4 UK and Ireland based organisations • • • • • High profile law firms Financially distressed LLPs LLPs with large operations in the USA Community health services and care homes Government organisations Why Choose Chubb? 4 Unique and broad coverage and services. ForeFront Plus for LLPs is a bespoke policy specifically written for LLP structures. It is recognised as one of the broadest management liability policies in the market, comprising cover that other insurers either do not include as standard or are unable to provide at all 4 Free from warranties and basis of contract clauses. 4 Expertise. The Chubb Group of Insurance Companies has more than 30 years of management liability insurance experience 4 Highest AM Best rating. This indicates Chubb’s financial strength and long-term ability to pay claims 4 Award winning claims service. Chubb’s claims team is consistently acknowledged as the best in the market Key Selling Points Cover/ Service Benefit Cover for ‘cyber liabilities’ 4 The internet and e-commerce have opened up a whole new risk environment by creating the possibility of ‘cyber’ liabilities and losses, some of which include: • Claims for copyright, trade secret and other intellectual property infringements • Defamation claims • Claims and investigations for privacy and data breaches • Computer fraud and funds transfer fraud losses caused by third parties • Costs of handling ‘cyber’ extortion where someone threatens to interfere with data or to disseminate customer records ForeFront Plus for LLPs addresses all of these aspects as part of the most basic cover option. No basis of contract clause 4 Chubb believes in clarity and does not have a basis of contract clause. The clause can be used to turn declarations into warranties which may result in claims not being paid. Whatever an insurer does in terms of waiving rights for non-disclosure or misrepresentation, it is still vital to check that the policy does not contain a basis of the contract clause. Waiving the right to avoid for non-disclosure or misrepresentation does not prevent an insurer relying on a basis of the contract clause to deny cover. Extra cover limits for directors, officers and members 4 The directors and officers liability section has two special extra amounts of cover: 1. If the directors and officers liability main section limit becomes exhausted, there will be a further limit for the policy period for paying such loss of an insured person as that insured person’s LLP is prevented by law or insolvency from reimbursing. This further limit is usually the lesser of £1,000,000 and 25% of the main section limit. It can be applied to such loss, even if such loss arises from the claim which led to the exhaustion of the main limit. 2. The directors and officers liability section provides an additional limit for payment of defence costs only. This limit is usually 10% of the main section limit. Automatic inclusion of cover for employee crime and kidnap and extortion expenses 4 Every ForeFront Plus for LLPs policy automatically provides a separate section limit for these covers free of charge. Optional increased limits are available for additional premium. Definition of insured person includes employees who are acting as COLP and COFA (as each of those terms is defined in the SRA Handbook Glossary of the Solicitors Regulation Authority) of an organisation. 4 Some insurers will use a standard, off the shelf, commercial product for insuring LLPs. Without bespoke aspects of a structure specific wording some of the critical exposures may not be adequately addressed. Option to provide outside directorship liability cover 4 LLP members, directors and officers are often at risk of liability through positions they take in outside organisations which are connected to their role with the LLP. ForeFront Plus for LLPs has an optional extension to accommodate this exposure. Worldwide coverage 4 Unlike many other insurers, Chubb does not exclude the USA from cover. Most LLPs have a website which gives them global visibility and exposure. No avoidance of rescission for misrepresentation or non-disclosure 4 Chubb is the only insurer that won’t look to avoid a claim in the event of misrepresentation or non-disclosure even if the action is fraudulent. However, an insured who knew the true position or non-disclosed facts when the policy was bought will not be covered. Case Studies Data room scam The Chubb Advantage A supervisor within the support department to the corporate division had responsibility for the operation of virtual data rooms. After various links had been identified between the employee and suspicious suppliers it was discovered that invoices had been paid for work that was not actually undertaken or, in some cases, was completely unnecessary. Allocation If a proposal form contains a mistake or untruth in it, a basis of contract provision could have a serious impact on the availability of cover. ForeFront Plus for LLPs has no basis of contract provision in the proposal form or in the policy. Chubb paid more than £2.6 million on this claim. The Chubb Advantage A former member brought arbitration proceedings against the LLP and an insured person for breach of duty and breach of contract in respect of alleged failure to notify him of proposed sale of a part of the business prior to his departure through early retirement. Unlike many insurers, the standard Chubb policy provides for 100% allocation of defence costs. Chubb ‘allocates’ to covered loss, and up to the directors and officers liability section main limit, 100% of the defence costs on account of an allegation against both an insured person and that person’s organisation, if both use the same lawyers. Other insurers will ‘allocate out’ the organisation’s share of the defence costs. This can make a significant difference to the percentage of an organisation’s costs that a broker has to advise may not be covered under the policy. In this case, the full £600,000 costs that the Chubb policy paid may not have been recoverable. Contact us For more information or to obtain a quote please call your local underwriting or sales contact. For all contacts, visit www.chubb.com/uk/marketinglibrary/contact BEST FOR FINANCIAL STRENGTH A++ Superior AM Best’s highest rating for financial strength BEST OVERALL SERVICE Insurance Times Broker Survey Winner: 4 times in the last 5 years BEST QUALITY OF COVER Insurance Times Broker Survey Winner: 4 times in the last 5 years BEST CLAIM SERVICE Insurance Times Broker Survey Winner: 4 times in the last 5 years A quality approach for 130 years Chubb’s winning performance reflects the disciplined application of a clear long-term strategy, regardless of the business cycle: ... employ and empower top quality underwriters; ... focus on attractive specialisms; ... offer the best niche covers in the market. Post Magazine, 2012 chubb.com/uk 120 offices in 26 countries Choose certainty. Choose Chubb. Commercial | Financial Lines | Chubb 1882 at Lloyd’s | Accident & Health | Private Clients This information is descriptive only. The precise cover provided is subject to the terms and conditions of the policy as issued. For promotional purposes, ‘Chubb’ means member insurers of the Chubb Group of Insurance Companies. For the purposes of training and monitoring our service, some telephone calls may be recorded. CHUBB INSURANCE COMPANY OF EUROPE SE, a European company incorporated in England and Wales and registered under Company Number SE13. CHUBB MANAGING AGENT LTD, a company incorporated in England and Wales and registered under Company Number 7116876. Registered Offices: 106 Fenchurch Street, London EC3M 5NB, England. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. © Chubb Insurance Company of Europe SE 2013 F39 03/14
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