Organization board members assume a level of responsibility when making tough, complex decisions that impact the company they represent. Held legally and financially responsible for the conduct of the institution, directors and officers do not always recognize the potentially devastating liability exposure that can place personal and institutional assets in jeopardy. Any organization, whether publicly traded, private or non-profit, has potential D&O exposure. The cost of legal defense when a director or officer faces a claim can be significant.

To make decisions without the threat of personal liability hanging over them Directors and Officers need to have D&O insurance in place to help protect them against significant defense and settlement costs. This coverage can be a Stand Alone policy or part of a packaged Business Insurance policy.

Private companies purchase an average of $50.7 Million in D&O Limits

The average settlement value of derivative shareholder action is $7.2 Million

18% of private companies have recently increased their D&O limits

Non Profits report the highest proportion of claims -61%

More than 1.5 Million non-profit organizations are registered in the US.

According to D&O Liability survey, 30% of respondents reported having a claim in the past 10 years

Lawsuits filed in 2013 by the FDIC claim $1.2 Billion in damages for the actions of directors and officers

In 2013, mergers and acquisitions (M&A) deals attracted an average of more than 5 lawsuits

In recent years, shareholders filed suit in more than 90% of M&A deals valued over $100 Million

94% of Merger & Acquisition deals were challenged by shareholders in 2013

From 2004-2013 derivative lawsuits made up 39% of all directors and officers liability claims

In recent years , shareholder derivative actions represent 17% of all securities litigation

According to the Bureau of Labor Statistics there are 2,303,200 top executives in the US and 261,500 top executives expected to enter the workforce by 2022

This is reprinted from 2016 issue, For more information; contact Corrin Trowbridge 650-876-9600,