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Publicly Traded

 Companies

One does not have to look very far these days to see why publicly traded corporations simply MUST carry adequate insurance coverage for their Officers and Directors.

ENRON, ADELPHIA, SUNBEAM, TYCO, CENDANT, XEROX, LESLIE FAY, WARNACO, KMART ... and now WORLDCOM ... these are just a few of the more recognizable corporate names that have been swept up in various forms of litigation, much of which focuses on the actions (or the inactions) of the corporate officers and the members of the boards of directors.  

Incidentally, ENRON reportedly carries D&O liability insurance limits of $365 Million - which is almost certainly going to be exhausted before the dust settles!  Heck, in 1999 the CENDANT settlement alone came to $2.83 Billion!

In fact, it is not at all uncommon for the first lawsuit to be filed within only 24-48 hours after the public disclosure of any sort of adverse corporate news.  Law firms of all sizes specialize in representing either plaintiffs or defendants in these actions.  Whether you like it or not, D&O litigation is "Big Business!"

Of course, the "dot.com" boom and bust of the past few years has only exacerbated the problem, as investors seek to recover on their losses.

All of this activity has not gone unnoticed by insurance companies, many of whom are now severely curtailing their underwriting activities as insured losses pile up.  

Some carriers have completely withdrawn from the public company D&O market, while others who, say, have been willing to write primary limits as high as $25 or $50 Million, have now reduced their capacity to maybe only $5 or $10 Million.  Excess coverage has also become much more expensive.  Excess pricing that might have been at 50-60% of the primary is now at 90-100% . . . or sometimes even more!!

In addition, insured corporations are being asked (forced?) to retain a higher degree of the risk (we call it, "keeping skin in the game") in the form of higher deductibles or retentions, as well as coinsurance.  

What does this all mean?  It means that now, more than ever, any publicly traded corporation - large OR small - needs to be absolutely certain that they are properly protected against D&O claims.  Please click here and complete a brief form.  You can also give me a call at 877-320-4061, or simply send me an e-mail at insurance@swicker.com.  

We work with a wide variety of insurance carriers, and our underwriters are adept at crafting highly individualized coverage to address the specific needs of all types and sizes of publicly held corporations.

I look forward to speaking with you soon.

Bruce R. Swicker