A Bulwark for Directors and Officers
A lot can happen in the business world in the space of eight years, and the world of commercial insurance is no exception. For those carriers offering coverage for executives and board members in the event that they are sued by shareholders or some other entity, the past eight years have given rise to a landscape that is much more perilous.
For one, D&O derivative litigation has increased in severity. Nine out of the top 10 largest derivative settlements have occurred since 2019, and more than 10 claims have now settled for more than $100 million dollars. Economic volatility in the form of a pandemic and a high-inflation environment have spurred an increase in private company insolvencies. Regulatory actions are getting increasingly aggressive and expensive.
All of that is fuel for the financial fires that can result in litigation and burn through coverage towers.
“Fifteen years or so ago, we were talking to our private company customers about why you need to buy traditional D&O insurance, and that conversation has largely gone away as these customers now have a better understanding of the many different types of losses that may impact this coverage,” said Keith Freid, product officer, private and nonprofit management liability for Berkshire Hathaway Specialty Insurance (BHSI).
To learn more about Berkshire Hathaway Specialty Insurance, please visit their website.