A third of private companies do not purchase any type of management liability insurance even as they increasingly enter business areas once considered the domain of large public companies, according to the 2005 Chubb Private Company Risk Survey.
The new survey was revealed at the recent Inc. 500 Conference, held by Inc. magazine to highlight achievements of creators of the 500 fastest-growing private companies in America. Marketing Leverage Inc., a market research firm in Connecticut, conducted the survey. The firm interviewed the chief executive, financial and other top officers at 451 privately held U.S. companies in 46 states, according to Chubb.
"As privately held companies continue to escalate their activity in areas that were once considered the domain of large, publicly owned companies, they have increased their exposure to potentially costly liability-related lawsuits, as well as to crime events such as workplace fraud and extortion," said Lisa McGee, vice president, Chubb & Son. "In an area such as directors and officers liability, the stakes can be especially high and financially devastating."
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