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Do private companies face a greater D&O risk than they realize?

Chubb’s 2016 Private Company Risk Survey shows that more than one in four of the private companies surveyed experienced a Directors & Officers (D&O) liability loss in the past three years — and 96 percent of those companies were impacted financially.
By: | August 9, 2016

According to Chubb’s 2016 survey of 1,012 private company executives in the U.S. and Canada — our sixth survey since 2003 — the answer is a resounding “yes.”

Chubb’s 2016 Private Company Risk Survey shows that more than one in four of the private companies surveyed experienced a Directors & Officers (D&O) liability loss in the past three years — and 96 percent of those companies were impacted financially. The results show that such losses impact companies of all sizes and industries, ranging from healthcare organizations, to manufacturers, to retailers and more.

Despite the frequency and impact of these events, many private companies have not purchased D&O insurance to help manage their risks. Why? Because non-buyers mistakenly believe the coverage is unnecessary, either because they are privately held or family run.

This belief stems from the misconception that most suits or fines are brought by shareholders, which is commonly the case in the more highly publicized suits brought against public companies. But for private companies, suits from customers, vendors/suppliers and other third parties most prevalently lead to losses. Even more alarming, when a non-buyer does experience a D&O loss, the average cost is nearly $400,000 — a sum that can have a serious and potentially devastating impact on any organization’s balance sheet.

To learn more about the D&O risks facing private companies and how companies are protecting their businesses from such losses, download Chubb’s infographic: D&O Risks and Risk Management.

Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit www.chubb.com. This information is a summary only. Products may not be available in all locations, and remain subject to Chubb’s underwriting criteria. Surplus lines insurance is sold only through licensed surplus lines producers.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Chubb. The editorial staff of Risk & Insurance had no role in its preparation.




With operations in 54 countries, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients.

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