Directors & Officers liability insurance pricing, terms, and availability are headaches for risk managers. Fortune 500 companies have seen premiums jump 200 to 400 percent. A recent poll conducted by CFO.com revealed that 27 percent of respondents said their D&O coverage costs have doubled or tripled. You need not be a Fortune 500 company, though, to face daunting D&O challenges.
Even before the Enron and WorldCom scandals, the D&O arena exhibited increasing litigation. Not only is coverage getting pricier, but policies also cover less. Exclusions create new financial vulnerabilities. Some call current D&O policies “baskets with leaky holes.”
As claims mount and the litigation wave breaks, high-profile claims increase, payouts escalate, and the struggle continues for risk managers and business executives. They need strategies and tactics to effectively manage D&O risks in a challenging environment. Certainly, directors and officers liability exposures have always been problematic. But never has the crisis been more acute than in the post-Enron era.
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