Difficult to comment without knowing the risk. You definitely need to tell your insurance broker as this is a material fact and these policies are generally written on a claims made basis, so you need to check there are no gaps in cover due to change of ownership (e.g. act by directors pre-acquisition may need run off cover). Suggest you ask your broker if they have access to benchmark data on D&O limits carried by other companies with a similar profile (by turnover; industry; geographical coverage; territories in which you are listed) – this won’t tell you whether the limit is sufficient, but will indicate what others do. Policy deductible is normally higher on D&O for claims brought in US and cover may be more restricted dependent on the underwriter. We currently maintain £20m limit, circa £250 t/o, including a couple of operations in North America.
FTSE 250said
We do not have any overseas directors
FTSE 250said
I would agree that this sounds light. It is also possible that your existing cover may be affected unless you disclose the US acquisitions to your insurers. You should ask for quotes from a number of brokers and for different levels of cover to establish the most cost effective option. For many years our D&O cover was £10 million and then increased to £15 million until last year when the business was retendered. We increased the cover to $50 million without any material increase in premium amount.
EX LISTEDsaid
Either a large international broker (Aon, Marsh or Willis) or a smaller broker with international contacts should be able to advise on this at nil cost. £5m certainly feels light to me (but without knowledge of the risk).
FTSE 100said
Given the litigious culture in the U.S., our experience is that cover up to an aggregate limit of GBP 5m would not be considered to be adequate, this is of course without knowing the specific detail of the company involved. Our insurance manager’s recommendation would, therefore, be to seek guidance from an international insurance broker like Aon, Marsh or Willis, or international lawyers like for example Allen & Overy who have a D&O Liability department. It may cost but your directors will sleep more comfortably at night!
Difficult to comment without knowing the risk. You definitely need to tell your insurance broker as this is a material fact and these policies are generally written on a claims made basis, so you need to check there are no gaps in cover due to change of ownership (e.g. act by directors pre-acquisition may need run off cover). Suggest you ask your broker if they have access to benchmark data on D&O limits carried by other companies with a similar profile (by turnover; industry; geographical coverage; territories in which you are listed) – this won’t tell you whether the limit is sufficient, but will indicate what others do. Policy deductible is normally higher on D&O for claims brought in US and cover may be more restricted dependent on the underwriter. We currently maintain £20m limit, circa £250 t/o, including a couple of operations in North America.
We do not have any overseas directors
I would agree that this sounds light. It is also possible that your existing cover may be affected unless you disclose the US acquisitions to your insurers. You should ask for quotes from a number of brokers and for different levels of cover to establish the most cost effective option. For many years our D&O cover was £10 million and then increased to £15 million until last year when the business was retendered. We increased the cover to $50 million without any material increase in premium amount.
Either a large international broker (Aon, Marsh or Willis) or a smaller broker with international contacts should be able to advise on this at nil cost. £5m certainly feels light to me (but without knowledge of the risk).
Given the litigious culture in the U.S., our experience is that cover up to an aggregate limit of GBP 5m would not be considered to be adequate, this is of course without knowing the specific detail of the company involved. Our insurance manager’s recommendation would, therefore, be to seek guidance from an international insurance broker like Aon, Marsh or Willis, or international lawyers like for example Allen & Overy who have a D&O Liability department. It may cost but your directors will sleep more comfortably at night!