An essential part of any Insurance program is the effective use of Risk Management and loss control strategies to mitigate exposure to loss and improve the risk profile of the client. For mining companies, the proper implementation of these strategies can help save them large costs in the long term.
Here are some quick facts about risk transferring for mining companies:
Corporate indemnification and insurance policies designed to protect Directors and Officers (D&Os) in mining can be complex and there are many variations of coverage and policies to consider before choosing one that can adequately protect your interests, particularly when it involves conducting work internationally
Before you purchase a D&O insurance policy for international coverage, here are some considerations you should take into account:
Due to the nature of their operations, mining companies are often liable for a variety of environmental-related risks and issues. If proper insurance is not obtained, the expenses and damages the mining company can experience from one lawsuit can be detrimental.
Here are some of the liabilities and exposures that need to be covered and the key considerations for them:
Corporate indemnification and insurance policies designed to protect Directors and Officers (D&Os) are complex technical documents. These “risk management” tools are not well understood and too often only considered when problems arise. Legislation concerning corporate governance and disclosure with a dramatic increase in litigation, is causing more boards to ask questions about the scope of protection afforded under the corporate indemnity and insurance policies that are designed to protect them.
Before you purchase a D&O insurance policy, here are some questions and considerations you should take into account:
Mining companies own many physical assets in their care. Depending on the stage and nature of the project or mine development, they will require coverage for assets such as contents of office and tenant improvements, camp buildings, stock and equipment, mobile equipment, automobiles, watercraft, drones, fuel supply and tank storage, and mining property.
Here are some of the exposures that need to be covered and the key considerations for them:
Mining company employees who must work overseas can be exposed to a number of risks that pose a threat and possibly endanger their lives. While operating in foreign jurisdictions and being unfamiliar with the local environment, it’s important to take into consideration what could happen and how to properly protect yourself and your company from harm.
Here are some exposures and their key considerations in relation to crisis response for employees of mining companies working overseas:
Canadian mining companies who operate in foreign jurisdictions need to understand local laws, regulations, customs and business practices. Most governments have strict rules relating to insurance policies covering risks in their own country. These rules are designed both for the public benefit by ensuring liquidity standards, as well as protectionist measures for their insurance market.
Here are some exposures and their key considerations in relation to international coverage for mining companies:
Also commonly referred to as an Individual D&O Policy, the Side A Coverage protects only the Directors and Officers rather than also providing coverages and benefits to the corporation. The coverage is exceptionally broad as it often contains few exclusions and many advantages to the D&Os.
Side A Coverage can also apply excess of the limits provided by the corporate policy, but will drop to pay first dollar and defense costs when no coverage is available through the corporate policy or if the corporate policy is held up in litigation.
There are many other benefits to having a Side A insurance policy in place. Take a look at some of the other reasons why directors and officers can benefit from this policy:
Directors and Officers (D&Os) of companies in the mining industry can be faced with a wide range of legal exposures arising from their duties to the corporation, and as such, having a Directors & Officers insurance policy in place can help cover financial losses that can arise from a variety of claims.
Insurance protection is provided under the Directors’ and Officers’ liability policy. There are commonly two types of insurance coverage available:
Directors and Officers (D&Os) of companies in the mining industry deserve to be protected through insurance policies as they are risking their personal assets for the benefit of shareholders. As such, having proper risk management systems and insurance policies in place that can cover against losses to the D&Os as well as the corporation are important.
Here are 3 levels of protection that are available to Directors and Officers of mining corporations to take into consideration: