<i>BI</i> white paper: D&O risks rising
Reprints
The directors and officers liability insurance market may still be soft, but corporations and their executives are facing an increasing array of exposures.
In addition to a barrage of credit crisis-related litigation, corporations are confronted by stepped-up regulatory enforcement efforts, an explosion in defense costs, ballooning settlements and numerous emerging liabilities, according to a new research white paper.
The white paper, “D&O 2.0: What You (and Your Boss) Need to Know About the Evolving Market,” finds that with the D&O market in its seventh year of declining rates, risk managers have access to plentiful capacity, but claims that do arise can quickly erode limits.
In one recent case, a $50 million D&O program was almost wiped out by defense costs in litigation that involved 17 law firms. Of the 15 largest class actions on record, 12 have been reached since 2006, according to the latest Business Insurance white paper.
While credit crisis-related suits are still wending their way through the legal system, other exposures are expected to hit corporations soon.
With the Securities & Exchange Commission this year issuing guidance to public companies on climate change-related disclosure requirements, D&O claims are likely, the paper finds.
Stepped-up enforcement of anti-bribery statutes, increased cyberattacks, health care reform legislation, the growth of opt-out settlements in class action litigation and a host of other risks are all likely to result into D&O claims, the paper says.
For more information on emerging D&O risks, an analysis of coverage developments, legal developments, the outlook for the D&O insurance market and more, see www.businessinsurance.com/whitepapers.
