Small-to-midcap businesses will be prone to rising primary coverage rates in the Directors and Officers (D&O) market in 2013, led by increased litigation and regulatory scrutiny, says Marsh.

A report prepared by Marsh's U.S. Financial and Professional Risks (FINPRO) practice showed renewal rates for overall D&O coverage were flat to slightly up for the fourth quarter of 2012 compared to Q4 2011, and risk-adjusted rates for the primary coverage increased by 4.1 percent.

This was higher than the 3 percent increase for total coverage, which includes all excess layers of a D&O program (A, B and C side coverage). Marsh warned that insureds could see continued firming throughout the year.

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