The annual Towers Watson Directors and Officers (D&O) Liability Survey tracks D&O insurance coverage purchasing patterns. This 34th in a series of studies provides organizations with critical structure and cost information for D&O insurance programs.
The D&O insurance marketplace is clearly firming, based on increased pricing experienced in many sectors. Forty-one percent of private/nonprofit respondents and nearly 30% of public companies indicated that their premiums had increased in 2012.
Interest in the amount and scope of coverage increased for both private and public companies. Most notably, 70% of directors and officers at private companies raised the issue, a 12-percentage-point increase over 2011’s 58%. Interest among public companies edged up from 77% in 2011 to 80% in 2012.
The biggest jump in directors and officers liability insurance claims in 2012 was brought about by regulatory actions, increasing to 23% of responses from 19% in 2011 and 16% in 2010. The increased concern over regulatory litigation may reflect new laws put in place since the financial crisis, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as an increase in whistleblower bounties.