Leadership In Action

What is Executive Liability? Hint: It’s More Than Just Professional Liability Insurance

August 23, 2021
Leadership In Action | 5 minute read

There is no one more uniquely qualified to lead ProSight’s Executive Liability vertical than industry veteran Keith Lavigne. With a career spanning over 25 years in underwriting, finance, and accounting, Keith brings the visionary expertise needed to build out ProSight’s Executive Liability Insurance capabilities.

Keith is no stranger to what this endeavor entails, having grown Everest’s Professional Liability Insurance portfolio by 300% before joining ProSight. He states candidly: “I came to ProSight to build out the Executive Liability team. That’s what I’m excited to do.”

Learn more about Keith’s plans in this informative Q&A that reveals all you need to know about Executive Liability at ProSight.

Q: First things first, what is Executive Liability Insurance?

KL: Executive Liability Insurance encompasses a variety of Management and Professional Liability Insurance products designed to protect organizations and individuals from risks that arise from running a business. These risks could be claims alleging employee discrimination, mismanagement, investor fraud—anything of that note that has the potential for lawsuits and financial losses to an organization or to individual insureds.

Q: Are Executive Liability and Management Liability the same thing?

KL: Typically, Management Liability Insurance only encompasses the protection of executives and the organization. The four major lines of business usually included in that definition are Directors and Officers Insurance, Employment Practices Liability, Fiduciary Liability, and Crime Insurance.

One large product line not included in that definition is E&O, or Professional Liability, which is what ProSight most notably does. So, there’s Management Liability and Professional Liability, and they’re rolled up in the loosely-used term of Executive Liability, which encompasses both of them.

Q: How does Surety, which is part of the vertical, fit into this equation?

KL: A surety bond, or what ProSight currently does, is called custom bonds. These bonds are a type of entity protection. If anything, they’re a balance sheet protection that provides coverage for an organization to conduct their business. For instance, you can’t come into a port without a custom bond. You need that kind of protection on Day One to perform your business. It’s that simple.

So, surety bonds are another entity protection, but they’re a completely different type of business than Executive Liability even though they’re part of the same vertical.

Q: Why an Executive Liability vertical at ProSight now?

KL: ProSight already offers Professional Liability insurance products that protect lawyers, accountants, and credit unions, so this is a natural progression. By extending these protections to company executives, we’ll complement our current offerings and ultimately provide a greater service to more types of organizations, including public companies, private companies, not-for-profit organizations, and financial institutions. But this broader approach does not mean off-the-shelf policies. Our insurance products will be tailored for the client, the business, and the size of the company.

For instance, we have one product for Accountants Professional Liability and one for Lawyers. We’ll have a separate product for public company D&O, another product for private companies, and still another product for nonprofits. They’re all tailored by type because the exposures are different. As an example, private companies typically don’t have securities exposures, but public companies do. Public companies are traded on the NASDAQ or an open market. Clearly, securities protection would exist under their line of business, which doesn’t exist for private companies.

Q: What will distinguish us from our competitors in the Executive Liability space?

KL: There are three main pillars to my approach that will make us stand out:

1. Our broad suite of products, as I just mentioned. We’re going to invest greatly in growing our product suite, but we’ll also be able to tailor these products to our insureds. Each insured is separate and distinct; you could have two very similar insureds in the same industry, same size, working in the same footprint, but I assure you they’ll have a lot of uncommon characteristics—like their debt structure, ownership, and financial position, to name a few.

2. A knowledgeable underwriting team with years of experience underwriting these specific products so they know the business, know the insureds, know their challenges, and are dedicated to finding (and have the resources to find) solutions.

3. Inhouse claims experts with connections to defense counsel that can provide unparalleled legal support for our insureds. This is extremely important because the majority of claims will most likely be settled in some type of arbitration or mediation.

Q: How will we provide value to our distribution partners?

KL: We’ll have an open, multifaceted distribution model. It could be wholesale or retail, it could be exclusive, it could be a program. We won’t be like some of our P&C competitors where you just plug in some information and get back a quote. We’ll offer the one-on-one ability to transact business. We’ll deliver the kind of customer service where producers can pick up the phone and talk to an underwriter—not to a service center, not to a call center.

Q: What is your short-term plan for the Executive Liability vertical?

KL: To grow our product offerings. I can’t stress this enough. In fact, we’ve just filed a new Excess Liability Policy form that I’m really excited about, and I have many more products on tap. As I indicated at the start of this conversation, we’re going to invest greatly into products.

Q: Do you have a long-term vision you’d like to share?

KL: Right now, we’re very concentrated in Professional Liability for lawyers, accountants, and credit unions. My long-term plan is to diversify our portfolio, so we’ll not only be doing business with these types of insureds, but with public companies and private companies, too. We’ll also be doing surety business. And I aspire to enter into some type of arrangement in the transactional liability space down the line.

—Written by the ProSight team