Director’s and Officers Liability Coverage Part One

As we discussed yesterday, there are some issues you need to be aware of when considering Director’s and Officer’s Liability Coverage.

Let’s take the issue of the amount of coverage.

How much is enough?

As an Organization you probably need more of it. There is no simple rule for how much D&O coverage a company should carry. A recent Towers Perrin study indicated that companies with a market cap of between $1 billion and $2 billion are carrying about $40 million in coverage, while $10 billion – plus companies are carrying about $195 million.

The maximum limit available in the market place is in excess of $1 billion. This however would not even be enough for the next Enron or WorldCom. You should seek to discover how your limits were arrived at, what the typical settlements are for comparable-size companies in the same industry.