NU Online News Service, Feb. 22, 2:01 p.m. EST
More companies are increasing their directors & officers' liability limits, according to survey results released by Towers Watson.
"Clearly, companies are reacting to the fact that D&O liability exposures facing directors and officers are arguably at an all-time high," said Larry Racioppo, leader of Towers Watson's executive liability practice.
The global professional services firm said 21 percent of those who took part in the survey increased their D&O limits, driven by the potential for litigation and concerns over regulatory investigations.
Mr. Racioppo said the soft insurance market may be contributing to the trend in increased D&O coverage since competition among carriers chasing fewer clients leads to reduced pricing.
Among private organizations, 35 percent on average bought excess Side-A coverage. The larger the company, the more likely they will buy this type of coverage, said Towers Watson.
"Clearly the Side-A policy has become an integral component of an organization's D&O program structure," the survey found.
Of the companies with international operations, 25 percent bought a local D&O policy in a foreign jurisdiction compared to 2 percent in 2008, when the survey was last conducted. Again, the larger the company, the more likely they purchased the coverage.
"Multinational organizations have a better understanding that the risk environment has clearly changed, and they are seeing that navigating local laws and regulations are complex," said Michael F. Turk, senior vice president at Towers Watson.
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