Professional Liability Professional Liability Insurance ProgramInsurance Program

Prepared by:Prepared by:Angela DeGroot & Jackie SwopeAngela DeGroot & Jackie Swope

Lockton Companies of Dallas, Inc.Lockton Companies of Dallas, Inc.717 N. Harwood, Suite 2500717 N. Harwood, Suite 2500

Dallas, TX 75201Dallas, TX 75201

Directors’ & Officers’ LiabilityDirectors’ & Officers’ LiabilityEmployment Practices LiabilityEmployment Practices Liability

Including:Including:

Table of ContentsTable of Contents

Insurance Carrier………………Page 1Insurance Carrier………………Page 1

Program Criteria……………….Page 2Program Criteria……………….Page 2

Overview of D&O………………Page 3Overview of D&O………………Page 3

Overview of EPL……………….Page 4Overview of EPL……………….Page 4

Program Highlights…………….Page 5-6Program Highlights…………….Page 5-6

Great American Great American Insurance GroupInsurance Group

The The Executive Liability DivisionExecutive Liability Division (ELD) of (ELD) of Great American Great American Insurance GroupInsurance Group, specializing in Directors’ and Officers’ , specializing in Directors’ and Officers’ (D&O) Liability Insurance, is located northwest of Chicago in (D&O) Liability Insurance, is located northwest of Chicago in Schaumburg, Illinois. Comprised of specialists in marketing, Schaumburg, Illinois. Comprised of specialists in marketing, underwriting and claims, The ELD has been providing quality underwriting and claims, The ELD has been providing quality professional liability insurance products and services since professional liability insurance products and services since 1986. The ELD of Great American has the capacity to write 1986. The ELD of Great American has the capacity to write up to $25 million limits of liability.up to $25 million limits of liability.  Great American Insurance Group, based in Cincinnati, Ohio, Great American Insurance Group, based in Cincinnati, Ohio, is one of the largest property & casualty groups in the United is one of the largest property & casualty groups in the United States. A strong surplus position and proud tradition of States. A strong surplus position and proud tradition of financial strength and stability make Great American the financial strength and stability make Great American the choice of thousands of agents, brokers and customers choice of thousands of agents, brokers and customers countrywide. The Group's lead company Great American countrywide. The Group's lead company Great American Insurance Company has maintained an A.M. Best Company Insurance Company has maintained an A.M. Best Company rating of "A" (Excellent) (financial size XIII) or better for more rating of "A" (Excellent) (financial size XIII) or better for more than 25 consecutive years as of October 31, 2003. than 25 consecutive years as of October 31, 2003.

1

Program CriteriaProgram Criteria

Through Lockton Companies, Great American intends Through Lockton Companies, Great American intends to provide Directors’ and Officers’ (D&O) Liability to provide Directors’ and Officers’ (D&O) Liability Insurance coverage to the Insurance coverage to the individual companiesindividual companies associated with associated with PestSurePestSure. Great American will offer . Great American will offer preferred premiums and coverage enhancements to preferred premiums and coverage enhancements to all of those all of those members of PestSuremembers of PestSure that meet the that meet the following criteria:following criteria:

1. Privately-held Company.1. Privately-held Company.2. Fewer than $100 million in assets.2. Fewer than $100 million in assets.3. Less than 1,500 employees.3. Less than 1,500 employees.4. Clean litigation history.4. Clean litigation history.5. Financially sound. 5. Financially sound. 6. An Organization structure of a Corporation, Limited6. An Organization structure of a Corporation, Limited Liability Corporation (LLC), or CooperativeLiability Corporation (LLC), or Cooperative..

For For PestSure membersPestSure members not meeting the above criteria, not meeting the above criteria, Great American will evaluate the risk and try to offer Great American will evaluate the risk and try to offer comparable terms.comparable terms.

22

Directors’ & Officers’ Directors’ & Officers’ LiabilityLiability

The D&O policy is made up of three parts:The D&O policy is made up of three parts:

I. I. Insuring Agreement AInsuring Agreement A

Instances where the Directors and/or Officers are not indemnified Instances where the Directors and/or Officers are not indemnified by the Company. The policy will pay on behalf of the Directors by the Company. The policy will pay on behalf of the Directors and/or Officers for such Loss.and/or Officers for such Loss.

II. II. Insuring Agreement BInsuring Agreement BInstances where the Company has, to the extent permitted or Instances where the Company has, to the extent permitted or required by law, indemnified its Directors and/or Officers. The required by law, indemnified its Directors and/or Officers. The policy will pay on behalf of the Company for such Loss.policy will pay on behalf of the Company for such Loss.

III. III. Insuring Agreement CInsuring Agreement C Instances where the Company has become legally obligated to Instances where the Company has become legally obligated to

pay as a result of a Claim.pay as a result of a Claim.

The policy applies on an “all risk” basis to claims made and reported The policy applies on an “all risk” basis to claims made and reported within the policy period for Wrongful Acts commonly defined as:within the policy period for Wrongful Acts commonly defined as:

3

““any actual or alleged act, omission, error, misstatement, any actual or alleged act, omission, error, misstatement, misleading statement, neglect, or breach of duty, or misleading statement, neglect, or breach of duty, or Employment Practices Wrongful ActEmployment Practices Wrongful Act, by any , by any Insured Insured PersonsPersons in their capacity with the in their capacity with the Company;Company; or any or any actual or alleged act, omission, error, misstatement, actual or alleged act, omission, error, misstatement, misleading statement, neglect, or breach of duty, or misleading statement, neglect, or breach of duty, or Employment Practices Wrongful Act, Employment Practices Wrongful Act, by the by the Insured Insured EntityEntity, but only with respect to Insuring Agreement C; or , but only with respect to Insuring Agreement C; or any matter claimed against any any matter claimed against any Insured PersonsInsured Persons solely solely by reason of their status with the by reason of their status with the CompanyCompany; or any matter ; or any matter claimed against any claimed against any Insured PersonsInsured Persons arising out of their arising out of their service as a director or officer of a non-profit service as a director or officer of a non-profit Outside Outside EntityEntity but only if such service is at the request of the but only if such service is at the request of the Company.Company.””

Employment Employment Practices LiabilityPractices Liability

Employment Practices Wrongful ActEmployment Practices Wrongful Act shall mean a shall mean a Wrongful ActWrongful Act related to employment including but not related to employment including but notlimited to:limited to:

1.1. Wrongful dismissal, discharge or termination of Wrongful dismissal, discharge or termination of employment, whether actual or constructive;employment, whether actual or constructive;

2.2. Employment related misrepresentation;Employment related misrepresentation;3.3. Sexual or workplace harassment of any kind;Sexual or workplace harassment of any kind;4.4. Discrimination;Discrimination;5.5. Wrongful failure to employ or promote;Wrongful failure to employ or promote;6.6. Wrongful discipline;Wrongful discipline;7.7. Wrongful deprivation of career opportunity, including Wrongful deprivation of career opportunity, including

defamatory statements made in connection with an defamatory statements made in connection with an employee reference;employee reference;

8.8. Failure to grant tenure;Failure to grant tenure;9.9. Negligent evaluation;Negligent evaluation;10.10. Failure to provide adequate workplace or employment Failure to provide adequate workplace or employment

policies and procedures;policies and procedures;11.11. Wrongful retaliation; orWrongful retaliation; or12.12. Employment related libel, slander, defamation, or Employment related libel, slander, defamation, or

invasion of privacy.invasion of privacy.

4

Program Program HighlightsHighlights

 

Employee Count Premium EPL Retention< 50 employees $ 5,000 $ 5,000< 100 employees $ 6,500 $10,000< 400 employees $ 8,000 $25,000< 750 employees $12,000 $50,000> 750 employees $18,000 $75,000 

 

These highlights are subject to individual underwriting These highlights are subject to individual underwriting review and state regulation. The terms and conditions review and state regulation. The terms and conditions may vary based upon underwriting consideration. Other may vary based upon underwriting consideration. Other coverage enhancements or restrictions may be applied coverage enhancements or restrictions may be applied according to various state regulations and individual according to various state regulations and individual underwriting reviews. Additionally, underwriting reviews. Additionally, PestSure risks that PestSure risks that are members of the ESOP Association may not be are members of the ESOP Association may not be eligibleeligible for this program, or may be required to use an for this program, or may be required to use an alternative distribution source.alternative distribution source.

Premiums for $1 million of coverage (maximum) as Premiums for $1 million of coverage (maximum) as follows:follows:

Entity Coverage including Employment Practices Entity Coverage including Employment Practices Liability Coverage. Liability Coverage. Punitive Damages Coverage where insurable, Punitive Damages Coverage where insurable, including most favorable venue wording.including most favorable venue wording. Worldwide Coverage. Worldwide Coverage.

-continued

5

Program Program HighlightsHighlights

 

Non-Profit Outside Directorship Liability Coverage.Non-Profit Outside Directorship Liability Coverage.

Non-cancelable except for non-payment of premium.Non-cancelable except for non-payment of premium.

Spousal Coverage.Spousal Coverage.

Employees defined as Insureds.Employees defined as Insureds.

12 Month Either/Or Discovery.12 Month Either/Or Discovery.

No Family, Major Shareholder, SEC, or Past Acts Exclusions.No Family, Major Shareholder, SEC, or Past Acts Exclusions.

Optional Fiduciary Coverage by endorsement (5% of Optional Fiduciary Coverage by endorsement (5% of annual premium, $0 retention).annual premium, $0 retention).

Optional Third Party Liability for Employment Practices Optional Third Party Liability for Employment Practices (5% additional premium). (5% additional premium).

Optional Duty to Defend provision at no additional Optional Duty to Defend provision at no additional premium (not available in California). premium (not available in California).

Optional separate Limit of Liability for Employment Optional separate Limit of Liability for Employment Practices Claims for 25% additional premium. Practices Claims for 25% additional premium.

Zero Retentions on all Claims other than Employment Zero Retentions on all Claims other than Employment Practices Liability Claims and Third Party Liability. Practices Liability Claims and Third Party Liability.

5

The Executive Liability DivisionThe Executive Liability DivisionGreat American Insurance GroupGreat American Insurance Group1515 Woodfield Road, Suite 5001515 Woodfield Road, Suite 500

Schaumburg, IL 60173Schaumburg, IL 60173Phone: (847) 330.6750 Fax: (847) 330.6890Phone: (847) 330.6750 Fax: (847) 330.6890

www.GreatAmericanELD.comwww.GreatAmericanELD.comwww.GreatAmericanInsurance.comwww.GreatAmericanInsurance.com

Need an application or Specimen Policy?Need an application or Specimen Policy?Visit our Web site, Visit our Web site, www.GreatAmericanELD.comwww.GreatAmericanELD.com and click and click on the on the Agent’s DeskAgent’s Desk section. There, you can download section. There, you can download applications & policies that are available in your state. applications & policies that are available in your state.

The coverages described in this presentation were compiled by the Lockton Companies and are presented in an abbreviated form. All insurance products described are subject to availability and underwriting qualifications. Other terms, conditions, and exclusions may apply. Policies may be underwritten by Great American Insurance Company, Great American E & S Insurance Company and/or Great American Insurance Company of New York.

The registered service marks "Great American" and "Great American Insurance Group" are the property of Great American Insurance Company."

######