HRH Releases D&O Snapshot and Forecast for 2005

December 23, 2004

Hilb Rogal & Hobbs has released its Directors and Officers Liability Snapshot and Insurance Market Forecast for 2005.

Legislation, regulatory activity, litigation and corporate governance requirements continue to impact the exposure of directors and officers to liability. Recent decisions and pending claims are defining (and redefining) the circumstances under which directors and officers are sued. While the number of claims (primarily securities class and derivative actions) may be somewhat consistent over time, the scope of the allegations of wrongdoing, the magnitude of the purported damages, and the liability impact of actual court decisions continue to make headlines.

Legislation (and compliance with these statutes and the implementing rules and regulations) may be expressly intended to provide clarity for the executives, but seems more successful in providing fodder for claims. While the number of claims brought has been consistent, the activity of regulators from all fronts has increased dramatically. In the face of all this potential for liability, many directors and officers are struggling with corporate governance requirements.

This D&O insurance market forecast looks at highlights of 2004 and looks forward, to 2005, with detail regarding prior market behavior, and educated expectations for 2005. Overall, it appears that heavy competition continues in the D&O insurance marketplace in certain market segments, particularly for private companies. However, some carriers have stated that they will not continue to follow the market in downward pricing trends if that means giving up on underwriting discipline.

Terms of coverage and structure of D&O programs are also front and center in 2005. The liability snapshot is intended to identify some of the major areas of risk exposure for directors and officers and identify some significant D&O insurance market trends.

To see the entire report visit: http://www.hrh.com/HRH_D&O_Forecast.pdf

Topics Legislation Trends Market Directors Officers

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