Market Insights

Companies are getting creative as D&O insurance rates skyrocket

Elon Musk's move to pay the Tesla board's insurance out of pocket emphasizes the benefit of captives amid galloping D&O rates.

By Jef Feeley and Katherine Chiglinsky | June 17, 2020 at 11:29 AM

Tesla opted against renewing its D&O policy for the 2019-2020 year 'due to disproportionately high premiums.' (Photo: Andrew Harrer/Bloomberg)

(Bloomberg) — When Elon Musk said in April he was dropping the insurance policy that protects Tesla Inc.’s board from shareholder lawsuits, it got Skip McBride’s attention.

To McBride, who used to manage law firm Bracewell LLP’s malpractice exposure, Musk’s decision to insure Tesla’s directors out of his own pocket was a first — and a risky move.

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