Search
 

D&O Uh-Oh: Large Class-Action Settlements Down, But Smaller Cases Way Up

The directors & officers liability market is an unpredictable, mispriced and likely under-reserved mess of cases waiting in many courts. And while rates are up in this sector, observers say that isnt enough to tip the scales.

By Chad Hemenway | Updated on April 12, 2012

The Directors and Officers liability market is definitely unpredictable, probably mispriced and very likely an under-reserved mess, sources say—and new federal provisions have many experts expecting a surge of filings.

While the number of securities class-action settlements and settlement amounts were down in 2011 vs. 2010, according to data compiled by Cornerstone Research, that fact alone does not paint a clear picture of the litigation landscape that D&O policyholders and carriers are facing.

Because while severity is down—securities class-actions can generate huge settlements—the frequency of smaller cases is up, leeching policy limits. 

“It has become a death by 1,000 cuts,” says Key Coleman, managing director at advisory service Grant Thornton. “Look out for the small non-class-action suits.”

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

PropertyCasualty360

Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join PropertyCasualty360.com now!

  • Unlimited access to PropertyCasualty360.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including BenefitsPRO.com, ThinkAdvisor.com and Law.com
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2024 ALM Global, LLC. All Rights Reserved.