D&O rates predicted to harden by 2009
JLT has launched a D&O Health Check Service to help companies obtain optimal coverage under their Directors’ & Officers’ liability insurance.
Michael Lea, JLT's head of D&O, said outside of the financial institutions sector, D&O rates were unlikely to harden before late 2008 or early 2009.
As key recommendations of the Health Check Service, companies should:
1. Manage internal expectations because market corrections result in an abrupt change in the rating and capacity offered - the D&O market is does not typically calibrate their premiums accurately according to exposure. It is highly competitive and capacity driven.
2. Secure higher limits now – In the current soft market you may be able to avoid having to sign a warranty statement or accepting prior acts exclusions, likely to be mandatory requirements in 12 months time.
3. Review the extent of your cover – it is unlikely that the quality of cover available will be affected by a change in market conditions,
Lea said: “The proliferation of new wordings and cover extensions has created a confusing situation for buyers that makes it difficult for them to compare different options.
“Because JLT’s team is involved in US, UK and international insurance, we have been able to build a very extensive database of the enhancements that are available. This has been the basis of our D&O Health Check Service where we will provide free no obligation policy wording analysis, or for a fee, actually re-draft wording.
"Clients will be able to access policy enhancements which are the result of extensive legal review and the accumulated experience of our D&O team, with no-obligation, confidentially and for free."
