Insurance Coverage for FCPA Investigation Costs
Published: 11-Jul- 2011 | Product Category: Financial and Professional
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Developed by Marsh’s FINPRO Practice to assist organizations in managing the rising costs of anti-bribery actions, FCPA Corporate Response is the only insurance mechanism that provides cost of investigation coverage for both individuals and the organization.
Designed for companies of all sizes that conduct business globally, FCPA Corporate Response reimburses companies for investigation costs including legal, accounting, auditing, and consulting fees due to a Foreign Corrupt Practices Act (FCPA) claim, provides coverage for both the organization and individuals for FCPA investigations, and acts as primary insurance to a directors and officers (D&O) liability policy to immediately protect individual directors and officers.
The insurance policy can be triggered by anti-corruption investigations launched under the FCPA as well as those initiated pursuant to the U.K. Bribery Act and other foreign regulations to the extent that they parallel the FCPA’s anti-bribery provisions. In addition to insurance coverage, Marsh’s FCPA Corporate Response provides clients with access to diagnostic and assessment services. These services are offered through a panel of consultants fluent in FCPA investigations and related issues.
About the Foreign Corrupt Practice Act
The anti-bribery provisions of the FCPA make it unlawful for a company, its employees, directors/officers, and agents to make a corrupt payment or give anything of value to a foreign government official for the purpose of obtaining or retaining business. Reports of new FCPA investigations involving bribery appear daily.
The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are vigorously conducting more than 250 civil and criminal investigations into alleged FCPA violations initiated against companies and individuals. Defense costs for FCPA investigations—including accounting, legal, and consulting fees—often range from single digit to triple digit millions. Global regulators are targeting high risk geographic regions, industry groups, and classes of individuals and companies. The number of these investigations, and costs to defend against the charges, continues to rise in 2011.
FCPA Corporate Response
- Reimburses companies for investigation costs including legal, accounting, auditing, and consulting fees due to an FCPA claim.
- Provides coverage for both the organization and individuals for FCPA investigations.
- Acts as primary insurance to a directors and officers (D&O) liability policy to immediately protect individual directors and officers.
- Responds to anti-corruption probes of foreign regulatory bodies to the extent that they are compatible with the FCPA.
- Pre-inquiry investigation costs from self-reporting or internal investigations that later materialize into a claim are recoverable.
- Named insureds include the company, all subsidiaries, and all persons employed and/or otherwise affiliated with or acting at the direction of the company, inclusive of independent contractors, consultants, and advisors.
- Definition of “claim” specifically tailored to include civil, criminal, administrative, and/or regulatory investigations and inquiries by U.S. government regulators and their foreign counterparts.
- Provides worldwide coverage.
- Advancement of costs are prior to the conclusion of an investigation.
- Exclusions are limited to prior notice and pending/prior litigation.
- Coverage is non-rescindable and non-cancellable.
- First of its kind FCPA cost of investigation coverage.
- Protects a company from the potentially exorbitant expenses incurred in defending itself.
- Preserves D&O liability policy limits for other uses
- Includes free comprehensive diagnostic and benchmarking analyses provided by highly trained and experienced FCPA consultants.
- Discounted costs of subsequent diagnostics, training, validation, and verification are available.
- Access to panel of consultants, inclusive of accountants and attorneys, fluent in FCPA investigations and issues.
FCPA Corporate Response was developed by experts in Marsh’s FINPRO Practice, in cooperation with major global insurers and subject matter experts following extensive research, analysis, and focus group studies.
To learn more about FCPA Corporate Response, or to discuss your organization’s FCPA exposures, please contact your local Marsh representative, or:
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