1. Forms
2. MP
3. MP-DS-00

Management Protection Policy Declarations (MP DS 00)

The MP DS 00 - Management Protection Policy Declarations is a foundational document in a Management Protection insurance policy. It acts as the "executive summary" of the insurance agreement, providing a snapshot of the key terms and conditions of the coverage. This form is crucial for both the insured and the insurer as it personalizes the broader policy language to the specific insured entity. It outlines who is insured, what coverages are provided, the limits of that coverage, applicable retentions (deductibles), and the policy period. The MP DS 00 also lists any endorsements that modify the standard policy terms.

The MP DS 00 is essential for the related MP 00 01 - Executive Liability Coverage Form, as the MP 00 01 provides the actual terms and conditions of coverage, while the MP DS 00 specifies the choices made by the insured within the framework of the MP 00 01. For example, the MP 00 01 will describe how Directors and Officers (D&O) liability coverage works, and the MP DS 00 will state the specific limit of liability purchased for D&O coverage.

Classes of Business It Applies To

Management Protection policies, and therefore the MP DS 00 Declarations, are designed for a wide array of organizations, both publicly traded and privately held, as well as not-for-profit entities. The specific coverage modules selected and detailed on the declarations page will vary based on the nature and exposures of the insured organization. Common coverage modules include:

• Directors and Officers (D&O) Liability: Protects past, present, and future directors and officers from personal financial loss arising from alleged wrongful acts in their managerial capacity. This is crucial for companies of all sizes, from startups seeking investment to large corporations with complex governance structures. For instance, if shareholders sue directors for mismanagement leading to financial losses, the D&O section of the Management Protection policy, as outlined in the declarations, would respond.
• Employment Practices Liability (EPL): Covers claims made by employees (and sometimes third parties) alleging wrongful employment acts such as discrimination, harassment, wrongful termination, or retaliation. This is vital for any business with employees. For example, if an employee sues for wrongful termination after a restructuring, the EPL coverage detailed on the MP DS 00 would apply.
• Fiduciary Liability: Protects fiduciaries who manage employee benefit plans (like 401(k)s or health plans) against claims of breach of their fiduciary duties under ERISA or similar laws. This is applicable to companies that sponsor employee benefit plans. An example would be a claim by employees alleging mismanagement of pension fund assets.
• Crime Insurance (often included or endorsed): Protects the company from financial losses due to employee theft, forgery, or third-party fraud. For instance, if an accounting employee embezzles funds, this coverage, noted on the declarations, would be triggered.

Real-world examples of businesses that would utilize this form include:

• A publicly traded technology company requiring D&O coverage for its board members and EPL coverage for its large workforce.
• A private manufacturing firm needing D&O, EPL, and Fiduciary Liability for its owners/officers and its employee benefit plans.
• A non-profit healthcare organization seeking protection for its board of trustees (D&O) and coverage for employment-related claims (EPL).
• Financial institutions may also have specialized management liability needs addressed through these types of policies.

Special Considerations

There are several important considerations when dealing with the MP DS 00:

• Accuracy is Paramount: The information on the Declarations page, such as the Named Insured, policy period, and selected coverages/limits, must be precisely correct. Any inaccuracies, like a misspelled name or incorrect address, could potentially lead to coverage disputes or even void the policy. For example, if "ABC Corp." is the legal entity, but the declarations list "ABC Inc.," this discrepancy could cause issues during a claim.
• Claims-Made Basis: Management Protection policies are typically written on a "claims-made" basis. This means the policy in effect when a claim is first made against the insured is the one that responds, regardless of when the wrongful act occurred (subject to any retroactive date). The policy period stated on the MP DS 00 is therefore critical.
• Retroactive Date: For claims-made policies, the declarations page may specify a retroactive date. This date limits coverage to wrongful acts that occurred on or after the specified date. It's crucial to ensure continuity of the retroactive date when renewing policies to avoid coverage gaps.
• Endorsements: All endorsements amending the policy should be listed on the declarations page. These can significantly alter coverage, so it's vital to review them carefully. For example, an endorsement might add an exclusion for a specific type of claim or, conversely, broaden coverage in a particular area.
• Severability: Management Protection policies often contain severability clauses, meaning the wrongful act of one insured person may not affect coverage for other innocent insured persons. The application, which is often referenced in the declarations, plays a role here.
• Notice Requirements: The policy will have specific requirements for reporting claims or circumstances that could lead to a claim. While not detailed on the MP DS 00 itself, the policy period on the declarations page dictates when such notices must be given.

Key Information for Agents and Underwriters

The MP DS 00 provides critical data points for agents and underwriters throughout the policy lifecycle:

• Risk Assessment: The selection of coverage modules, limits, and retentions on the declarations page offers underwriters a clear view of the insured's perceived risks and the level of protection sought. This, combined with the application and other underwriting information, helps in assessing the overall risk profile of the applicant. For instance, a company purchasing high D&O limits with a low retention might signal a higher perceived risk in that area.
• Pricing: The limits of liability, chosen retentions, specific coverages selected (D&O, EPL, Fiduciary, Crime), and any unique endorsements listed on the MP DS 00 are key inputs into the premium calculation. Higher limits or broader coverage will generally result in higher premiums.
• Coverage Gaps: Agents should carefully review the MP DS 00 with their clients to identify any potential coverage gaps. For example, if a company sponsors a complex employee stock ownership plan (ESOP) but has not selected Fiduciary Liability coverage, this represents a significant gap. Comparing the expiring declarations with the renewal terms is also crucial to spot any unfavorable changes in limits, retentions, or endorsements.
• Underwriting Guidelines: Underwriters use the information on the declarations (in conjunction with the application) to ensure the risk fits within their company's underwriting guidelines and risk appetite. For example, certain industries or companies with a history of frequent claims might require higher retentions or specific exclusions, which would be reflected on the declarations or attached endorsements.
• Named Insured Complexity: For organizations with complex structures (e.g., multiple subsidiaries, joint ventures), ensuring all appropriate entities are correctly listed as Named Insureds on the MP DS 00 is vital. This impacts who is entitled to coverage.
• Prior Acts Coverage: The retroactive date, if any, shown on the declarations is a critical underwriting consideration. A "full prior acts" coverage (no retroactive date) presents a broader exposure for the insurer than a policy with a recent retroactive date.
• Relationship to MP 00 01: The MP DS 00 must always be read in conjunction with the MP 00 01 (and any other applicable coverage forms and endorsements). The declarations provide the "what," "who," and "how much," while the coverage form provides the detailed "how" and "when" of the coverage.

By carefully reviewing and understanding the MP DS 00, insurance professionals can ensure that the Management Protection Policy accurately reflects the insured's needs and provides the intended coverage.