[sheet: D&O Tower (2022-2023)]

[sheet: D&O Tower (2022-2023)]
Layer | Carrier Full Legal Name | Carrier Short Name | Carrier Domicile | Policy Number | Inception Date | Expiration Date | Per-Claim / Per-Occurrence Limit | Aggregate Limit | Attachment Point | Self-Insured Retention | Annual Premium | Prior Year Premium | Premium Change ($) | Premium Change (%) | Coverage Type | Follow-Form / Manuscript | Key Coverage Grants | Notable Exclusions | Named Insured(s) | Broker of Record | Notes / Changes from Prior Year
Primary | Vandermeer National Insurance Company | Vandermeer | Connecticut | VNI-DO-2022-91205 | 07/01/2022 | 07/01/2023 | $10,000,000 | $10,000,000 | $0 (ground-up) | $1,000,000 (entity coverage); $0 (Side-A/individual) | $536,200 | $487,500 | $48,700 | 9.99% | Side-A / Side-B / Entity (Side-C equivalent for private company) | Manuscript | D&O liability; entity securities liability; employment practices; regulatory investigation defense costs; pre-claim inquiry costs | Insured vs. Insured; prior/pending litigation (as of prior policy inception); bodily injury/property damage; professional services E&O; ERISA §409/§502 | Nexford Industrial Holdings Inc.; Nexford Conveyor Systems, LLC; Triton Fastener Corp.; Marlowe Asset Management Precision Machining, Inc. | Ashford Breckinridge LLP (Phillip Garza / Tamara Fisk) | Renewed; definition of 'Claim' under review — post-bind identified as narrower than negotiated terms; corrective endorsement requested from carrier via Ashford Breckinridge (pending as of 08/12/2022)
1st Excess | Commonwealth Indemnity Group | Commonwealth | Pennsylvania | CIG-DO-2022-44718 | 07/01/2022 | 07/01/2023 | $10,000,000 | $10,000,000 | $10,000,000 | N/A (follows primary SIR) | $343,500 | $312,000 | $31,500 | 10.10% | Follow-form excess | Follow-form to Vandermeer primary | Follow-form; drop-down upon exhaustion of underlying | Follow-form; prior acts exclusion scope noted in gap analysis | Nexford Industrial Holdings Inc.; Nexford Conveyor Systems, LLC; Triton Fastener Corp.; Marlowe Asset Management Precision Machining, Inc. | Ashford Breckinridge LLP (Phillip Garza / Tamara Fisk) | Renewed with incumbent; no carrier change
2nd Excess | Northfield Excess Insurance Company | Northfield | New York | NEI-DO-2022-10237 | 07/01/2022 | 07/01/2023 | $10,000,000 | $10,000,000 | $20,000,000 | N/A (follows primary SIR) | $221,000 | $198,750 | $22,250 | 11.20% | Follow-form excess | Follow-form to Vandermeer primary | Follow-form; drop-down upon exhaustion of underlying | Follow-form to primary | Nexford Industrial Holdings Inc.; Nexford Conveyor Systems, LLC; Triton Fastener Corp.; Marlowe Asset Management Precision Machining, Inc. | Ashford Breckinridge LLP (Phillip Garza / Tamara Fisk) | NEW CARRIER — Northfield Excess Insurance Company replaces Graystone Mutual Assurance Co. (outgoing carrier, Ohio domicile)
3rd Excess | Pinnacle Re Insurance Ltd. | Pinnacle Re | Bermuda | PRI-DO-2022-78501 | 07/01/2022 | 07/01/2023 | $10,000,000 | $10,000,000 | $30,000,000 | N/A (follows primary SIR) | $108,000 | $141,200 | -$33,200 | -23.51% | Follow-form excess | Follow-form to Vandermeer primary | Follow-form; drop-down upon exhaustion of underlying | Follow-form to primary | Nexford Industrial Holdings Inc.; Nexford Conveyor Systems, LLC; Triton Fastener Corp.; Marlowe Asset Management Precision Machining, Inc. | Ashford Breckinridge LLP (Phillip Garza / Tamara Fisk) | Renewed with incumbent; premium decrease
Side-A DIC | Harrington Specialty Insurance Co. | Harrington | Delaware | HSI-DIC-2022-00385 | 07/01/2022 | 07/01/2023 | $20,000,000 | $20,000,000 | N/A (dedicated; non-eroding by underlying) | $0 (no SIR on Side-A DIC) | $289,500 | $224,000 | $65,500 | 29.24% | Side-A only — Difference-in-Conditions (personal directors & officers coverage only) | Manuscript DIC | Non-indemnifiable loss; bankruptcy/insolvency of entity; wrongful refusal to indemnify; DIC trigger where underlying fails to respond; personal liability of 9 board members (4 independent, 5 sponsor-appointed) | Entity coverage excluded; intentional fraud/criminal conduct (final adjudication); prior/pending litigation known at inception | Individual directors and officers of Nexford Industrial Holdings Inc. only (not entity) | Ashford Breckinridge LLP (Phillip Garza / Tamara Fisk) | LIMIT INCREASED from $15M to $20M per board request; premium increase reflects both limit increase and rate adjustment; critical given Veltrano Capital Partners 68.5% ownership and 5 sponsor-appointed directors; recommended in C&H Side-A DIC analysis memo (06/03/2022)
TOTAL D&O TOWER | — | — | — | — | — | — | — | $60,000,000 ($40M traditional tower + $20M dedicated Side-A DIC) | — | — | $1,498,200 | $1,363,450 | $134,750 | 9.88% | — | — | — | — | — | — | Rate-on-Line (renewal): 2.50% on $60M; Prior Year ROL: 2.48% on $55M
[sheet: PL Tower (2022-2023)]
Layer | Carrier Full Legal Name | Carrier Short Name | Carrier Domicile | Policy Number | Inception Date | Expiration Date | Per-Occurrence Limit | Aggregate Limit | Attachment Point | Self-Insured Retention | Annual Premium | Prior Year Premium | Premium Change ($) | Premium Change (%) | Coverage Type | Follow-Form / Manuscript | Product Recall Sub-Limit (Per Occ) | Product Recall Sub-Limit (Aggregate) | Completed Operations Tail | Key Coverage Grants | Notable Exclusions | Named Insured(s) | Broker of Record | Notes / Changes from Prior Year
Primary GL/PL | Midland Casualty & Surety Company | Midland | Illinois | MCS-GL-2022-58904 | 07/01/2022 | 07/01/2023 | $5,000,000 | $10,000,000 | $0 (ground-up) | $500,000 (per occurrence) | $1,259,000 | $1,125,000 | $134,000 | 11.91% | Primary Commercial General Liability / Products-Completed Operations | Manuscript | $5,000,000 | $10,000,000 | 10 years post-delivery | Premises/operations; products-completed operations; personal & advertising injury; product recall (sub-limited); contractual liability; cross-liability among named insureds | Pollution (absolute with limited exceptions); professional services E&O; expected/intended injury; war/terrorism; asbestos/lead/silica; EIFS | Nexford Industrial Holdings Inc.; Nexford Conveyor Systems, LLC; Triton Fastener Corp.; Marlowe Asset Management Precision Machining, Inc. | Ashford Breckinridge LLP (Phillip Garza / Tamara Fisk) | Renewed with incumbent; PRODUCT RECALL SUB-LIMIT INCREASED from $2.5M occ / $5M agg to $5M occ / $10M agg per C&H recommendation (06/07/2022 memo); incremental premium for recall increase: $67,000; recall sub-limit endorsement formal attachment pending as of 08/12/2022; completed operations extension confirmed in post-bind review
1st Excess / Umbrella | Great Basin Insurance Company | Great Basin | Nevada | GBI-XS-2022-33291 | 07/01/2022 | 07/01/2023 | $25,000,000 | $25,000,000 | $10,000,000 | N/A (follows primary SIR upon exhaustion of primary aggregate) | $975,000 | $862,500 | $112,500 | 13.04% | Excess / Umbrella (follow-form with limited independent grants) | Follow-form to Midland primary with umbrella extensions | Follow-form | Follow-form | Follow-form | Follow-form to primary; umbrella drop-down upon underlying exhaustion; defense costs outside limits (umbrella portion only) | Follow-form; pollution exclusion breadth noted as broader than primary in gap analysis; 'other insurance' clause conflicts identified | Nexford Industrial Holdings Inc.; Nexford Conveyor Systems, LLC; Triton Fastener Corp.; Marlowe Asset Management Precision Machining, Inc. | Ashford Breckinridge LLP (Phillip Garza / Tamara Fisk) | Renewed with incumbent; pollution exclusion breadth flagged in preliminary gap memo but not resolved at renewal
2nd Excess | Cornerstone Reinsurance Corp. | Cornerstone | New York | CRC-XS-2022-20874 | 07/01/2022 | 07/01/2023 | $25,000,000 | $25,000,000 | $35,000,000 | N/A | $493,500 | $437,000 | $56,500 | 12.93% | Follow-form excess | Follow-form to Midland primary | Follow-form | Follow-form | Follow-form | Follow-form; drop-down upon exhaustion of underlying | Follow-form to primary | Nexford Industrial Holdings Inc.; Nexford Conveyor Systems, LLC; Triton Fastener Corp.; Marlowe Asset Management Precision Machining, Inc. | Ashford Breckinridge LLP (Phillip Garza / Tamara Fisk) | Renewed with incumbent; no carrier change
3rd Excess | Allegheny Pacific Underwriters, Inc. | Allegheny Pacific | California | APU-XS-2022-15609 | 07/01/2022 | 07/01/2023 | $15,000,000 | $15,000,000 | $60,000,000 | N/A | $258,000 | $218,400 | $39,600 | 18.13% | Follow-form excess | Follow-form to Midland primary | Follow-form | Follow-form | Follow-form | Follow-form; drop-down upon exhaustion of underlying | Follow-form to primary | Nexford Industrial Holdings Inc.; Nexford Conveyor Systems, LLC; Triton Fastener Corp.; Marlowe Asset Management Precision Machining, Inc. | Ashford Breckinridge LLP (Phillip Garza / Tamara Fisk) | Renewed with incumbent; no carrier change
TOTAL PL TOWER | — | — | — | — | — | — | — | $75,000,000 | — | — | $2,985,500 | $2,642,900 | $342,600 | 12.96% | — | — | — | — | — | — | — | — | — | Rate-on-Line (renewal): 3.98% on $75M; Incremental premium for product recall sub-limit increase ($2.5M/$5M → $5M/$10M): $67,000 (included in Midland primary premium)
[sheet: Combined Summary]
Metric | D&O Tower 2021-2022 | D&O Tower 2022-2023 | D&O Change | PL Tower 2021-2022 | PL Tower 2022-2023 | PL Change | Combined 2021-2022 | Combined 2022-2023 | Combined Change
Total Aggregate Limit | $55,000,000 | $60,000,000 (incl. $20M Side-A DIC) | +$5,000,000 (Side-A DIC increase) | $75,000,000 | $75,000,000 | $0 (no change) | $130,000,000 | $135,000,000 | +$5,000,000
Total Annual Premium | $1,363,450 | $1,498,200 | +$134,750 (9.88%) | $2,642,900 | $2,985,500 | +$342,600 (12.96%) | $4,006,350 | $4,483,700 | +$477,350 (11.91%)
Rate-on-Line | 2.48% | 2.50% | +0.02 pp | 3.52% | 3.98% | +0.46 pp | — | — | —
Insurance Spend as % of Revenue ($1.42B) | 0.096% (D&O only) | 0.106% (D&O only) | +0.01 pp | 0.186% (PL only) | 0.210% (PL only) | +0.024 pp | 0.282% | 0.316% | +0.034 pp
Number of Carriers | 5 | 5 (1 replacement) | Northfield replaces Graystone on 2nd Excess | 4 | 4 | No changes | 9 | 9 | —
Board-Authorized Premium Cap | — | — | — | — | — | — | — | $4,600,000 | Actual $4,483,700 (under cap by $116,300)
SIR — Entity/Primary | $1,000,000 (entity) | $1,000,000 (entity) | No change | $500,000 (per occ) | $500,000 (per occ) | No change | — | — | —
Side-A DIC Limit | $15,000,000 | $20,000,000 | +$5,000,000 | N/A | N/A | N/A | — | — | —
Product Recall Sub-Limit (Per Occ / Agg) | N/A | N/A | N/A | $2,500,000 / $5,000,000 | $5,000,000 / $10,000,000 | Doubled | — | — | —
Completed Operations Tail | N/A | N/A | N/A | 10 years | 10 years | No change | — | — | —
Primary Layer Premium | $487,500 | $536,200 | +$48,700 (9.99%) | $1,125,000 | $1,259,000 | +$134,000 (11.91%) | $1,612,500 | $1,795,200 | +$182,700 (11.33%)
Excess Layer Premium (all excess) | $651,950 | $672,500 | +$20,550 (3.15%) | $1,517,900 | $1,726,500 | +$208,600 (13.74%) | $2,169,850 | $2,399,000 | +$229,150 (10.56%)
Side-A DIC Premium | $224,000 | $289,500 | +$65,500 (29.24%) | N/A | N/A | N/A | $224,000 | $289,500 | +$65,500 (29.24%)
Total 5-Year PL Incurred Losses | — | — | — | $15,120,000 | $15,120,000 | — | — | — | —
D&O 5-Year Loss Record | $0 (clean) | $0 (clean) | No change | N/A | N/A | N/A | — | — | —
[sheet: Carrier Changes Detail]
Tower | Layer | Outgoing Carrier | Outgoing Carrier Domicile | Outgoing Premium | Incoming Carrier | Incoming Carrier Domicile | Incoming Premium | Premium Difference ($) | Reason for Change
D&O | 2nd Excess ($10M xs $20M) | Graystone Mutual Assurance Co. | Ohio | $198,750 | Northfield Excess Insurance Company | New York | $221,000 | +$22,250 | Graystone non-renewed; Northfield selected via competitive marketing through Ashford Breckinridge; improved wording consistency with primary Vandermeer form; follow-form basis confirmed
[sheet: Key Changes & Outstanding Items]
Item # | Tower | Category | Description | Prior Year Term | Renewal Term | Premium Impact | Status | C&H Recommendation Reference | Responsible Party
1 | D&O | Carrier Replacement | 2nd Excess layer: Northfield Excess Insurance Company replaces Graystone Mutual Assurance Co. | Graystone Mutual, $198,750 | Northfield Excess, $221,000 | +$22,250 | Bound | Carrier Quote Comparison Matrix (06/10/2022) | Ashford Breckinridge LLP
2 | D&O | Limit Increase | Side-A DIC (Harrington Specialty): limit increased from $15M to $20M dedicated | $15M dedicated; $224,000 premium | $20M dedicated; $289,500 premium | +$65,500 | Bound | Side-A DIC Policy Analysis Memo (06/03/2022); Board request | Ashford Breckinridge LLP / Harrington Specialty
3 | PL | Sub-Limit Increase | Product recall sub-limit in Midland Casualty primary GL/PL increased | $2.5M per occ / $5M aggregate | $5M per occ / $10M aggregate | +$67,000 (incremental) | Bound; endorsement formal attachment PENDING as of 08/12/2022 | Product Recall Sub-Limit Adequacy Memo (06/07/2022) | Ashford Breckinridge LLP / Midland Casualty
4 | D&O | Post-Bind Wording Discrepancy | Vandermeer primary (VNI-DO-2022-91205): definition of 'Claim' in issued policy narrower than negotiated terms — excludes informal regulatory inquiries contrary to agreed language | Negotiated: includes informal regulatory inquiries | Issued: excludes informal regulatory inquiries | N/A (wording, not premium) | OUTSTANDING — corrective endorsement requested via Ashford Breckinridge; response deadline 08/31/2022; noted as open at matter dormancy 08/12/2022 | Post-Bind Policy Wording Review — D&O (07/22/2022); Follow-Up Endorsement Tracking Letter (08/05/2022) | Ashford Breckinridge LLP / Vandermeer National Insurance Company
5 | PL | Post-Bind Wording Confirmation | Recall sub-limit increase and completed operations extension confirmed in Midland Casualty primary issued policy forms | N/A | Confirmed as reflected per post-bind review | N/A | Confirmed (07/25/2022); formal endorsement attachment still pending | Post-Bind Policy Wording Review — PL (07/25/2022) | Ashford Breckinridge LLP
6 | D&O | Overall Premium Increase | D&O tower total premium increase | $1,363,450 | $1,498,200 | +$134,750 (9.88%) | Bound 06/28/2022 | Board Presentation Memo (06/22/2022) | N/A
7 | PL | Overall Premium Increase | PL tower total premium increase | $2,642,900 | $2,985,500 | +$342,600 (12.96%) | Bound 06/28/2022 | Board Presentation Memo (06/22/2022) | N/A
8 | Combined | Board Cap Compliance | Combined D&O + PL tower premiums within board-authorized cap of $4,600,000 | $4,006,350 | $4,483,700 | +$477,350 (11.91%); under cap by $116,300 | Confirmed compliant | Board Resolution (06/22/2022) | Nexford GC / VP Risk Management
[sheet: Claims & Loss Context]
Item | Tower | Description | Amount | Status | Relevance to Renewal
Higgins v. Nexford Conveyor Systems, LLC et al. | PL | Case No. 2021-L-04382 (Circuit Court, Will County, IL); crush injury from Model NCS-7200 conveyor; filed 09/14/2021 | $14,500,000 (damages sought) | Active; in discovery at time of renewal | Known/pending claim at renewal; occurrence-based coverage — covered under prior and renewal policies; reserves included in Midland primary; defense cost erosion tracked
Consolidated Builders Supply Co. v. Triton Fastener Corp. | PL | Case No. 1:21-cv-08914 (N.D. Ill.); Grade 8 hex bolt structural failure; filed 11/02/2021; MTD denied 02/11/2022 | $6,800,000 (damages sought) | Active; motion to dismiss denied; proceeding to merits at time of renewal | Known/pending claim at renewal; occurrence-based coverage — covered under prior and renewal policies; reserves included in Midland primary
Total Open PL Reserves (as of April 2022) | PL | Combined reserves across Higgins and Consolidated Builders claims | $8,300,000 | Open | Erodes Midland primary $10M aggregate; monitored for potential excess layer attachment
IBNR Estimate (Kessler Quinn Advisory Group) | PL | Incurred But Not Reported estimate per actuarial analysis by Diana Cho, Kessler Quinn | $2,100,000 | Estimate | Factored into limits adequacy analysis; total 5-year incurred = $15.12M ($4.72M paid + $8.3M reserves + $2.1M IBNR)
Five-Year PL Paid Losses | PL | 12 reported claims; 9 closed | $4,720,000 (total paid) | Closed | Underwriting history; total 5-year incurred $15.12M
Triton Fastener Voluntary Recall (March 2020) | PL | Voluntary product recall initiated 03/12/2020 | $1,100,000 | Closed | Historical recall cost supporting sub-limit increase to $5M/$10M
NCS Advisory Notice (August 2020) | PL | Advisory notice (not formal recall) issued 08/07/2020 | $340,000 | Closed | Historical recall-related cost; combined with Triton recall = $1.44M against prior $2.5M/$5M sub-limit
Five-Year D&O Loss History | D&O | One reported claim (shareholder demand letter, 2020); resolved without payment | $0 (zero paid losses) | Closed | Clean D&O loss record supporting favorable renewal terms