Directors and Officers (D&O) liability insurance provides coverage for the directors and officers of corporations and other entities against legal judgments and related expenses resulting from allegations of wrongful acts committed in their individual capacity as company directors and officers.
Directors and Officers (D&O) coverage is a critical coverage for publicly traded companies. Directors and officers of publicly traded companies have legal responsibilities to shareholders and other corporate constituencies. These responsibilities, and the role of corporate directors and officers, have changed significantly over the past two decades. Directors and officers are increasingly being held accountable for their role in situations that adversely effect the financial condition of a company and its shareholders.
Recent judicial decisions, regulatory scrutiny, corporate takeovers and industry consolidation have increased the exposures and liabilities affecting the Directors and officers of publicly traded corporations. Added to this is a volatile stock market and a plaintiffs bar waiting for each mistake. Underwriting results at many insurers of public company Directors and officers have not been favorable. Continued volatility in the stock market could lead to an unprecedented number of claims against corporate executives.
The D&O market for public companies is undergoing change as underwriters are reassessing their approaches. The past few years have seen intense competition and deteriorating loss experience in this segment. This turmoil has created a great opportunity to compete for new accounts, and to market existing accounts.