Rancho Mesa's Alyssa Burley and Associate Account Executive Jack Marrs talk about Directors and Officers Liability Insurance.

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Director/Host: Alyssa Burley

Guest: Jack Marrs

Producer/Editor: Megan Lockhart

Music: “Home” by JHS Pedals, “News Room News” by Spence

transcript

[Introduction Music]

Alyssa Burley: Alyssa Burley: Hi! This is Alyssa Burley with Rancho Mesa’s Media Communications and Client Services Department. Thank you for listening to today’s top Rancho Mesa news brought to you by our safety and risk management network, StudioOne™. Welcome back, everyone. My guest is Jack Marrs, Associate Account Executive with Rancho Mesa. He specializes in risk management for human services organizations. Jack, welcome to the show.

Jack Marrs: Thanks for having me, Alyssa.

AB: Of course. So, before we get started, do you have time for a couple of rapid fire questions?

JM: Oh gosh, sure.

AB: Alright, grilled or raw onions?

JM: Grilled.

AB: Bicycle or motorcycle?

JM: Motorcycle.

AB: Hot or cold pizza?

JM: Hot.

AB: Indoors or outdoors?

JM: Outdoors.

AB: Workout or veg-out?

JM: Veg-out.

AB: Surf or relax on the beach?

JM: Relax on the beach.

AB: In N Out or Five Guys?

JM: In N Out.

AB: Alright.

JM: Dang, that was quick.

AB: I told you that they were going to be rapid fire.

JM: I thought that was gonna be like, some human services, just fire questions real quick.

AB: No, just all things that you should probably know the answers to.

JM: Yeah.

AB: Alright so, today we’re going to talk about Directors & Officer’s Liability insurance. While an insurance agent must continually stay abreast of industry trends and market conditions, it’s equally important to educate our clients on the inforce insurance policies. And, as a non-profit focused insurance agency, Rancho Mesa is accustomed to having those important conversations with clients regarding Directors & Officer’s Liability insurance, also known as D&O policies. And, we’re going to address D&O policies over the next few months in a series of episodes, but today, we’ll focus on Side A. But first, Jack, why do organizations have D&O policies?

JM: That’s a great question. Most non-profit board members understand they may be held personally liable for financial damages they cause while serving the organization. This scenario might occur if a director or officer unintentionally misappropriates funds, isn’t transparent about a conflict of interest, or unknowingly violates workplace laws. In this case, personal assets can be exposed without a D&O Policy in place. Fortunately, the D&O policy’s Side A insuring agreement addresses the concerns and protects the personal assets of the organization’s directors.

AB: That sounds like it would be pretty important. Having a D&O policy allows organizations to attract qualified board members who do not want to put their personal assets at risk in order to serve on the organization’s board. And, I’ve served on boards of two non-profits and for a local government, and I certainly would not want to have my personal assets at risk, should something have gone wrong. Now, I understand the top three most common insurance agreements within the D&O insurance policy are Side A, Side B, and Side C. Let’s talk about the Side A and we’ll get to the others in another episode. So, will you explain what Side A is for everyone?

JM: Of course. Side A covers the cost of claims not indemnified by the organization. A claim made against an officer during a bankruptcy is one such example. Without this coverage, the officer will be liable for defense costs. Fortunately though, Side A insurance agreements typically don’t have a self-insured retention, which acts similar to a deductible.

AB: Ok so, Side A is really important to have in order to protect the personal assets of those board members. So Jack, if listeners have questions about their policies, what's the best way to get in touch with you?

[Outro Music]

JM: I can be reached at (619) 486-6569 or my email which is jmarrs@ranchomesa.com with two r’s.

AB: Jack, thank you for joining me in StudioOne™.

JM: Thanks for having me, Alyssa.

AB: This is Alyssa Burley with Rancho Mesa. Thanks for tuning in to our latest episode produced by StudioOne™. For more information, visit us at ranchomesa.com and subscribe to our weekly newsletter.