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Directors and Officers Pursuing More Protection from Litigation

March 7, 2012 (PLANSPONSOR.com) - An increasing number of corporate directors and officers are showing more interest in the insurance programs their companies use to protect them against potential litigation.

This is an indication they are growing concerned over the wide range of exposures confronting them, according to an annual survey by global professional services company Towers Watson. The 2011 Directors and Officers (D&O) Liability Survey also found that many U.S. public companies, as well as private and nonprofit organizations, increased their D&O liability limits last year.  

More than two-thirds (69%) of respondents reported they received an inquiry regarding the amount and scope of their D&O insurance coverage in 2011, an increase from 57% in 2010. The survey also found that 25% of public companies surveyed and 14% of private and nonprofit companies said they had increased their D&O limits at renewal.  

Regulatory claims again topped the list of D&O liability concerns overall, with 81% of respondents citing this as a top three concern, an increase from 78% in 2010. More than two-thirds (68%) of respondents ranked direct shareholder and investor lawsuits as a top three concern, followed by derivative shareholder/investor litigation (58%).  

In addition, nearly two-in-10 (18%) private and nonprofit organizations reported a greater increase in their primary D&O policy premium, with only 11% attributable to a primary limit increase.

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