Only 3 percent of survey participants with international operations have purchased separate D&O liability insurance policies for other individual countries, according to Towers Perrin's 2007 Insurance Purchasing and Claims Trends Survey.

Forty-three percent of all survey participants indicated that their firms are global.

Many countries do not permit non-admitted D&O insurance policies to cover local directors and officers, and the non-admitted worldwide U.S. D&O policy is not permitted to pay claims, regardless of the policy language. As a result, the worldwide U.S. D&O policy does not provide the global protection that many insureds may believe they have with their D&O policy.

Other survey highlights include:

o Most participants had not purchased independent director liability policies, but 30 percent of private companies and 21 percent of public firms indicated they were at least considering it.

o The D&O insurance market remains soft. Repeat participants reported an average decline in premiums of 14 percent, compared to 4 percent the previous year.

o Participants were split roughly in half between those that purchase a stand-alone fiduciary liability policy and those that obtained this coverage through their D&O policy.

o 18 percent of participants decreased their limits, compared to only 4 percent in 2006. Repeat survey participants, however, reported an average 13 percent increase in limits.

o Purchases of Side A only coverage declined.

o Repeat participants reported a 14 percent reduction in retentions compared to 2006.

o D&O inquiries by potential board members were generally lower than prior years, except for nonprofit organizations. Sixty-seven percent of nonprofits reported D&O inquiries, compared to 32 percent the previous year.

The Towers Perrin survey, which included a record 2,927 participants, is the 30th in a series of studies on D&O liability insurance purchasing and claims trends and the most in-depth study of its type.

For more information, visit www.towersperrin.com.

Special Reports /

U.S. firms rely on U.S. worldwide D&O policies: Towers Perrin survey

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