(D&O) insurance policies are never standard and continue to evolve.

Below is a shorthand list of provisions to review carefully when it is policy renewal time. Use this checklist to make sure that basic coverage is in place and to serve as the basis for further discussions with risk management professionals and counselors.

Insuring Agreement and Trigger of Coverage

Negotiate for D&O policies that include a single triggering event (a claim made against the policyholder). “Double - anchor” policies (involving a claim made against the policyholder and notice to the insurer) are more difficult to trigger, which reduces coverage.

Definition of “Claim”

Ensure that the definition of “claim” is broad enough to include court litigation as well as administrative, regulatory, civil and criminal proceedings of all types, including subpoenas.

Obtain coverage for all investigations, whether internal or external and formal or informal.

Issues Relating To Defense Costs and Settlement

Review the insurer’s list of panel counsel; endeavor to negotiate alternatives.

Beware of “consent to settle” clauses that give the insurer the power to force a settlement or expand consent to defense.

Exclusions

Obtain conduct-based exclusions that require a “final adjudication” and finding of fraud or other “bad” conduct in the underlying litigation only and not in other proceedings, including coverage action.

Narrow prior acts, prior notice and prior pending litigation exclusions by pushing back the prior litigation date to the earliest date possible.

Insist on an illegal profits exclusion that requires a “final adjudication” in the underlying litigation and a carve-out barring the insurer from raising exclusion in merger claims.

Provisions Protecting Independent and ‘‘Innocent” Directors and Officers

Ensure that the policy includes severability provisions in both conduct based exclusions and the application.

Beware of broad policy “warranty” and “warranty letters” provisions.

Include priority of payments provisions, which help ensure that individual insureds obtain maximum protection and are “paid first.”