ACORD 171 (D&O Application)
The ACORD application form for Directors and Officers liability insurance submissions.
What It Is
The ACORD 171 is the Directors and Officers (D&O) Liability application supplement. It captures detailed information about the applicant's corporate structure, board composition, financial condition, regulatory environment, and claims history relevant to D&O underwriting.
The form includes sections on securities offerings, mergers and acquisitions, pending litigation, regulatory investigations, and the company's corporate governance practices. It also addresses Side A, Side B, and Side C coverage selections.
As a management liability product, D&O underwriting relies heavily on the financial and governance information captured on the ACORD 171, making thorough and accurate completion essential for competitive placements.
Why It Matters for Brokers
D&O liability is a specialized placement that requires brokers to understand corporate governance, securities regulation, and the specific risks facing a company's directors and officers. The ACORD 171 provides the structured format for presenting this complex risk profile to underwriters. Brokers who can effectively complete the ACORD 171 and articulate the client's governance strengths position the account for better terms. Incomplete or inaccurate D&O applications frequently result in coverage exclusions or declinations.
Real-World Example
A privately held technology company with 200 employees and a $50M revenue is preparing for a Series C funding round. The broker completes the ACORD 171 documenting the board composition (5 independent directors, 2 insider directors), clean claims history, no pending litigation, and strong corporate governance practices including a written code of conduct and D&O indemnification agreements. The detailed application secures a competitive D&O quote with $5M limits.
Common Mistakes
- 1Not disclosing pending or threatened litigation on the ACORD 171, which is the most common basis for D&O claim denials.
- 2Failing to accurately describe the company's financial condition, particularly if it is experiencing losses or has covenant violations.
- 3Omitting information about planned corporate transactions (M&A, IPO, restructuring) that significantly affect D&O risk.
How brokerageaudit.com Handles This
Submission Intake provides guided ACORD 171 completion with prompts for common D&O underwriting concerns based on the applicant's industry and corporate structure.