Author Archives: Chris Davis

PL Risk Helping Hands to Attend Shatterproof Walk

By Drew M Smith PL Risk Helping Hands is getting ready for its participation in the annual Shatterproof 5K Walk in New York City. For the past several months, members of the team and their fellow coworkers have been raising money and awareness towards the walk, with a goal of raising $10,000 for this charity. On September 25th, three weeks before the walk, PL Risk exceeded that goal. Shatterproof is an organization was founded by Gary Mendell whose son tragically took his own life after a short life of addiction. Gary’s mission is to eliminate the stigma of addition so that the issue can be discussed and brought to the forefront as an illness not something in the shadows. Last year 60,000 people in this country died of opioid overdose or addition. To put that in context that is as many people in one year as died in the entire Vietnam War. Gary’s organization has been instrumental in getting legislation passed that requires ambulance drivers to have Naloxone which is a drug that can save overdose victims. Many people who died could have been saved if this drug was standard. They also have helped pass other legislation such as good Samaritan laws and mandatory prescription monitoring laws. Christine DeFelice, a member of PL Risk Helping Hands has been at the forefront of their effort to help this cause. “Shatterproof is dedicated to ending the stigma of addiction and help the families affected,” She said. “1 in 3 people are affected in some way by the opioid crisis, including some of our fellow staff. We hope to continue to support this cause going forward.” Click Here for more information, to donate, join the walk or learn more information about this organization

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What is a Major Shareholder Exclusion in a D&O Policy?

Below is an article written by one of our producers, Matt Culkin. This article focuses on an important exclusion in a standard Private Company D&O policy that is often overlooked and misunderstood by agents, their insureds, and even underwriters themselves. What is a Major Shareholder Exclusion in a D&O Policy? Written by Matt Culkin Many Directors and Officers liability insurance policies often include what’s known in the industry as a “Major Shareholder Exclusion” or “Major Securities Holder Exclusion.” It’s a fairly standard exclusion for a D&O policy, but often is misunderstood by both policyholders and their insurance agent or brokers. The Exclusion: This exclusion is restrictive language common within D&O policies which excludes coverage for claims made against the company coming from individuals who own a large percentage of the insured’s stock. This percentage is determined on a case by case basis by the underwriter’s review of the insured’s capitalization table and/or ownership structure. In general, 5-15% is the percentage of stock ownership owned by an individual(s) or an entity for which they are then deemed a “Major Shareholder.” Wording Example (Ten Percent (10% Major Shareholder Exclusion): “It is understood and agreed that Section III. A. of Coverage Part A is amended by the addition of the following: With respect to all Insuring Agreements, the Insurer shall not be liable to make any payment for Loss in connection with any Claim made against any Insured: by or on behalf of any shareholder or other individual or entity owning directly or beneficially ten percent (10%) or more of any interest of the Company.” The Logic: There are a number of reasons behind the inclusion of this language. The principal motive is intended to limit coverage for those individuals who have the most influence on decisions being made on behalf of the company. It also encourages those “Major Shareholders” to take a more proactive approach to the management of the company. Lastly and most importantly, the lack of the exclusion creates a moral hazard as decisions makers (major shareholders) could make improper corporate decisions and have insurance coverage for their actions for which they are the direct beneficiary. The Misconception: Frequently, policy holders and their insurance agent or broker mistake the exclusion and believe the exclusion is limiting coverage for those individuals who own more than a certain percentage of the company….
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PL Risk Approved as a Continuing Education Provider

Drew M. Smith PL Risk Advisors, Inc. is proud to announce they have been certified as a Continuing Education Provider by the department of banking and insurance for the state of New Jersey. The state recently approved the company to provide CE classes for insurance agents and brokers in New Jersey. The three approved courses are: Cyber Insurance: An overview of what it covers, assessments and claims scenarios. Avoiding E&O Claims: Identifying key risk areas, claims scenarios and risk management. Private Company D&O: An overview of what it is, what it covers and why private companies need it. When asked about the new designation, CEO Mike Smith had this to say, “It is a great privilege to take part in this program. We will be able to provide a greater value to our clients. We intend to offer CE classes free of charge to our clients to help them better understand their risk climate and how to mitigate their losses.” As of this writing, New Jersey is the only state that has approved their courses. However, PL Risk has applications pending in multiple states. We at PL Risk are grateful for all the work our employees have done to make this possible. We hope to build on the success of this program and provide courses on more topics in the future. If you would like more information about these courses or would like to schedule a class for your company, please contact: Mary Salerno 732-908-6648 or 201-847-9165 ext. 123

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