News & Insights

Complex influences are impacting some directors and officers’ liability cover

Published 18 May 2022

With increased market investment directors and officers’ (D&O) liability cover is becoming easier to access at more affordable terms, but all policies are not equal and it’s a case of buyer beware. 

There’s more choice of insurers due to new entrants  to the D&O market with no exposure to the development of prior notified legacy risk. These are providing welcome alternatives to current market offerings but lack of transparency of settlement sums and the number of unresolved claims call for closer scrutiny of insurer offerings, which may be subject to factors that are not immediately obvious.

In the H1 2022 edition of the Business Insurance and Risk Market update report our article reports that the D&O insurance market is subject to complex influences, including

  • variations in financial security and claims paying capacity
  • boards may not understand the magnitude of their risks
  • obtaining with strong terms at a reasonable price may require a combination of insurers
  • broker advice is critical to an accurate appraisal of offerings.

Further complications that may have a bearing for Australia-based businesses include overseas insurers that may not qualify to provide coverage locally; and the need for businesses retaining risks to quantify what this might mean.

Other topics include:
  • Placement – why making a case for cover to local insurers is important.
  • Claims – the impacts of weather events on supply chain delays and claims inflation.
  • Disability sector – the factors making insurance for this sector hard to find.
  • Environmental, social responsibility and governance (ESG) – with an increased focus on ethical business practice insurers are scrutinising accountability
  • Cyber security – how businesses need to meet the escalation of the risk environment
  • Regional Australia ‒ why the regional construction sector is facing crisis.
Download the report to learn more
 

Looking for business risk and insurance advice?

During this time of change you can turn to our Gallagher experts for advice and guidance. We are here for you and will do everything we can to help you face the future with confidence.

 

Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective.
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