Filed Under:Agent Broker, E&S/Specialty Business

Dodd-Frank & Corporate Investigations: Should D&O Insurance Cover The Cost?

Although in-house risk professionals and corporate lawyers may not relish the opportunity to review their company’s directors and officers liability insurance policy, provisions of the Dodd-Frank Act should prompt them to seriously consider the scope of their coverage.

In addition to the passage of the act, formerly known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, an increasingly active regulatory environment is another factor pointing to the urgency of such a review for all public companies—especially smaller ones.

Corp. Investigations Coverage: Then and Now

Prior to 2011, D&O coverage for certain categories of internal corporate investigations was relatively standard in most primary D&O policies.

These reporting provisions, along with the monetary incentives of Dodd-Frank, present the company at issue with a number of potential challenges:

• More internal investigations as a result of the clear financial incentives of employees and others to “blow the whistle.”

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