Entoro Insurance Services Monthly Newsletter Feb 14

February 14, 2023

Directors and Officers Insurance Benefits

The Importance of D&O Insurance for Private Companies

Most public company executives understand that D&O insurance is necessary for a publicly traded company, but some private company managers believe they don't need it as they think they won't face a D&O lawsuit. However, companies with this view often find out the hard way that insurance is needed when a claim arrives. The right time to buy D&O insurance is when you think you don't need it. Some private companies with few shareholders overlook that plaintiffs in a D&O claim can be customers, vendors, competitors, regulators, creditors, among many others. Defending even trivial lawsuits is expensive, but the cost of D&O insurance for private companies is low and offers broad coverage, including balance sheet protection. It should be part of every private company's risk management portfolio, not just those with a wide ownership base. Contact Entoro Insurance Services, LLC today to learn more.

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Success Story of the Month

Oil Pipeline Inventory Insurance

One of America's largest and most diversified midstream energy companies, with over one hundred thousand miles of energy infrastructure, came to Entoro Insurance Services for a "Stock Throughput" insurance policy in Q4 of 2022.

This inventory-related insurance policy provides coverage for spills in the event of unpredictable accidents. The policy provides coverage for a section of pipeline moving an inventory of 500,000 plus barrels of crude per day.  After the events surrounding the Nordstream incident, the policy was only placeable by working closely with very creative London based insurance syndicates. Coverage provided includes $20 million per event with multiple peril coverage.

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Off-the-Wall Insurance Product

Private Placement Life Insurance (PPLI)

Every day brings a new idea for protecting wealth and income from the IRS, with the latest being life insurance - a seemingly outdated investment. Private Placement Life Insurance (PPLI) is a tailor-made type of variable life insurance that is available only to "accredited" or "qualified" investors. Currently, PPLI is primarily offered through broker-dealers, banks, hedge fund managers, and niche insurers, rather than major traditional insurance companies.

PPLI generates buzz despite variable universal life policies having similar tax benefits because it offers these key advantages

  1. Lower premiums due to long-term commitment of policyholders.
  2. Lower fees and commissions.
  3. Customized investment strategy options that align with financial goals. Note: Although policyholders have control over the growth of their policy's value, it is limited after implementation.

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Entoro Insurance Services

Entoro Insurance Services, LLC (EIS) is a relationship-driven organization existing to protect our clients’ financial interests by providing comprehensive risk management services. We are dedicated to continuous improvement, professionalism, and the highest ethical standards in the industry.Note: This article is for informational purposes only and should not be considered tax, legal, or other professional advice. Professional advice should be sought from a retained expert.


EIS Contacts

Doug Higgins
Managing Partner
Entoro Insurance Services, LLC
D: +1 863.581.6194
E: dhiggins@entoro-insurance.com

Laura Garza
Director, Operations
Entoro Insurance Services, LLC
D: +1 832.987.2484
E: lgarza@entoro.com