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Demand for D&O coverage rises: Towers Watson

Policyholders need more education.

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Although more businesses are raising their liability limits, many still don’t have a firm grasp on their coverage. Over one third of the businesses taking part in Towers Watson’s 2010 D&O Liability survey say that they’re not sure how their D&O programs are structured.

Such findings create an opportunity for brokers and other management liability consultants to educate both nonprofit and private company clients about their D&O insurance, according to a Towers Watson bulletin outlining the findings.

“The more educated purchasers are of the nuances of D&O policies, the better prepared they will be in utilizing the program to provide that last line of defense,” Larry Racioppo leader of  Towers Watson’s executive liability group, said in a February 22 statement.

Higher limits

The survey results outline clear trends: more businesses increased their D&O limits in 2010–21% have done so, up from 12% in 2009. Another 75% kept their existing limits and only 3% lowered them.

“Insurance buyers continue to be threatened by an ever-expanding litigation environment and have an increased awareness over regulatory issues they might encounter,” Racioppo said.

Businesses also report more global dealings–53% of respondents said they have international operations, and 47% had bought a local D&O policy abroad, compared to 2% in 2008.

Respondents also expressed confidence in their insurance representatives and brokers–over half say they haven’t had their programs reviewed independently. Those that did (46%) used a third party broker (20%), law firm (19%) or consultant (7%).