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Skyline, downward graph and coronavirus cells. Over the past decade, event-driven claims have become increasingly common, resulting in market fluctuations and leading to the belief that corporations are to blame for concealing or misrepresenting some key aspect of their corporate governance. (Photo: Shutterstock)

When directors and officers (D&O) insurance was first introduced by the London underwriting market in the 1930s, it was intended to cover a narrow range of emerging liabilities. Following the Great Depression and the uptick in securities regulation, there was a perceived need for insurance to protect corporate officers from the risks of doing business.

Although the product did not catch on until the late 1960s, after the Escott v. Barchris decision from the Southern District of New York determined that corporate directors and officers could not recoup their losses from the company, it has since become a staple of most corporations’ insurance portfolios. Like many insurance products, it has evolved continuously to meet the needs of insureds as the landscape of liability shifts and, in many cases, grows.

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