NU Online News Service, June 19, 2:05 p.m.EDT

Chubb says there is a “general lack of concern” among surveyedpublic companies that their directors and officers will face alawsuit.

According to the survey of 145 public companies, 80 percentthink it is unlikely their executives will be sued.

“No one thinks they are going to get sued, but we are paying alot of claims,” says Evan Rosenberg, senior vice president andglobal specialty lines manager for Chubb.

He calls the results of the survey “disconcerting,” since 23percent of the surveyed companies admitted their directors andofficers have been sued.

The question of how much coverage a company should buy can beanswered by asking the company how much they can afford,saysRosenberg.

“Rates have gone down the last 7-8 years but the number of casesis not down; neither is how much attorneys charge for a defense,”he says. “Companies need to perform a scientific measuring ofD&O risk.”

Those that manage exposure “have a greater chance of receivingmore favorable terms and pricing for the directors' and officers'liability insurance,” Rosenberg adds.

He says the newest phenomenon relates to mergers and acquisitioncases. Both companies involved in the transaction can be sued. Infact, there is a 90 percent chance that the acquired company willbe sued by its shareholders, Chubb says.

Despite this, 26 percent of companies do not have a documentedmerger and acquisition protocol, which may help to improve theirdefense in court and/or result in a lower settlement amount,Rosenberg says.

Surprisingly, 78 percent of survey respondents are not worriedabout an investigation due to a violation of the Foreign CorruptPractices Act, which is now more aggressively enforced by the U.S.Securities and Exchange Commission and the Department of Justice.These investigations and related fines could cost a companymillions of dollars.

D&O policies can cover defense costs and fines fornon-willful violations of the act, Rosenberg says.