Navigating Directors’ and Officers’ (D&O) Market Trends



Regardless of your business’s size, legal action against senior leaders can occur without warning and easily total thousands of pounds. That’s why purchasing suitable D&O cover is vital. At a glance, D&O insurance provides legal cost protection for a range of claims, including actual instances or allegations of wrongful acts, errors, omissions, negligence or breach of duty by any member(s) of your senior leadership team.

Nevertheless, insurance experts confirm that current D&O market trends have made it increasingly difficult for organisations like yours to secure adequate levels of cover. Indeed, senior leaders being held increasingly accountable for large-scale organisational disasters (e.g. cyber-attacks, environmental incidents and financial failings) has generated unfavourable D&O market conditions across the UK.

In recent years, the D&O market has experienced a major shift as senior leaders have been held more accountable by their fellow employees, clients and government bodies for organisational failings. As a result, stakeholders have begun taking increased legal action against individual leaders within organisations rather than the company as a whole when incidents occur. With this in mind, it is important that your business holds the appropriate insurance cover to protect your senior leadership team against the complex risks they face.

Top Tips for Securing Robust D&O Cover

Despite the harsh implications of D&O market trends, you can help your organisation maintain adequate cover with this guidance:

1. Communicate with your broker—Make sure you meet with your insurance broker to discuss what level of cover and unique policy features your organisation needs. After all, your broker has the insurance expertise to provide you with the most cost-effective, high-quality cover solutions. Ensuring frequent communication with your broker will help you stay informed and supported during the current tough market conditions.

2. Start the renewal process early—In a difficult market, you can’t wait until the last minute to secure quality cover. With this in mind, be sure to engage in your D&O policy renewal process as early as possible. Doing so will give you plenty of time to gather any documentation required for renewal. In addition, insurers will likely ask more questions than usual before finalising your policy—making it even more vital to get a head start on the process.

3. Invest in risk management—Now more than ever, it’s vital to invest in robust D&O risk management processes and provide documentation of these practices to your insurer upon renewal time. Your risk management documentation should highlight:

· Proper financial practices, cash flow controls and healthy profit margins

· Seamless contracts with stakeholders

· A business continuity plan, cyber-incident response plan and risk assessment

· Robust internal policies to mitigate on-site risks and ensure regulatory compliance

Miles Smith can work with you to identify all the risks your business faces and create solutions to protect you. For guidance and to learn more about our D&O insurance solutions, please email Ian Cook, Interim Managing Director of Miles Smith Insurance Solutions – icook@milessmith.co.uk or call 020 7977 4800.

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