Last updated on September 23, 2020
Goodmans recently published an update on challenges and trends seen in the market for private and public company D&O insurance. Premiums and deductibles have been increasing sharply and businesses in some sectors have been unable to obtain adequate coverage or renew their policies at any price. COVID-19 certainly has added to these challenges.
The update notes the following trends in the current D&O market:
Increased Underwriting. Insurers now require more detailed information than in the past and the underwriting process has become more time consuming, labour intensive and unpredictable.
Reductions in Breadth of Coverage. Reductions in coverage may include exclusions for COVID-19-related claims, as well as comprehensive bankruptcy, creditor and cyber-related claims.
Reductions in Limits. Some insurers are reducing policy limits on renewals and competitors are often unwilling to step in. Few insurers are willing to participate in increased excess limits.
Increased Retentions. Increases in deductibles are common.
Higher Premium Rates. Prices have increased significantly. Many insureds are accordingly reducing coverage at a time when their exposure could potentially be increasing.
Market Hesitancy. D&O insurers are often not eager to quote new business, leaving insureds, particularly first-time insureds, with fewer options.
Go here to read the full update from Goodmans, including their recommendations on how companies should address these challenges and what are immediate steps that ought to be taken.