ForeFront Plus for LLPs

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
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•
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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
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Winner: 4 times in the last 5 years
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Winner: 4 times in the last 5 years
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CHUBB INSURANCE COMPANY OF EUROPE SE, a European company incorporated in England and Wales and registered under Company Number SE13.
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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
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