Market will follow Liberty's lead in widening cover
Broker Miller has predicted that D&O insurers will begin to broaden their policy cover in response to changes made by Liberty International Underwriters.
In the last few months Liberty has launched a new D&O policy wording with features that Miller says make it stand out in the crowded D&O market. These include no pollution exclusion, no bodily injury/property damage exclusion and cover for shareholder derivative costs.
David Walters, Director – Professional Risks at Miller, said: “Liberty has really shaken the market with its coverage enhancements, in particular the ‘no pollution exclusion’ covering directors – cover which has previously only been available from specialist US markets.
“We predict that the D&O market will now have to carefully consider its response. Our view is that several other D&O carriers will begin to follow suit. The move towards providing even broader cover may attract higher pricing at first, but the hugely competitive nature of the market normally results in rates falling after a brief period.
Walters added: “It is usual that new products try to broaden coverage, particularly in a ‘soft’ market, however insureds should bear in mind that that the experience of the underwriting team and the capacity and security behind the product are an important part of the mix. With the legislative environment under constant change, companies should give serious consideration to the product either at the primary level or in excess layers.”
