We receive quite a few questions regarding Management Liability, this being one of them. Here is our description of Spousal Extension.
If a Director or Officer is sued in a community property state, plaintiff’s bar often sues the spouse as well so as to be able to access community property assets. This provision extends coverage to the spouse as well to address this potential exposure.
As always if you have any questions, please don’t hesitate to contact your Socius representative.
In fact, there’s actually no such thing entitled “hammer” clause in a policy; it’s industry jargon. It refers to the somewhat dramatic image of the insurer holding a hammer to use on the insured, as a metaphor to describe the insurer’s right to settle a claim when the insurer believes it is the best course of action to take. At times, insured and insurer will not agree on whether to settle a case. So in most policies, the insurer retains the right to make that decision, if the insured wishes to carry on with the matter, then it must do so without insurance in most cases. There are many differences in how a “hammer” clause is applied- ranging from absolute (“hard” hammer clause”) to compromising (“soft hammer clause”).
As always, if you have any questions please contact your Socius representative.