The second day of the 2013 PLUS D&O Symposium featured panel discussions on typical concerns of corporate directors, D&O exposures outside the United States, D&O claims handling, and thoughts about what will drive the industry in 2013. There was also an insightful luncheon keynote address on coping with the volatile economy.
The common theme of the day’s panel discussions was just how broad the set of risks faced by today’s corporations is. Government and civil investigations, whistleblowers, activist investors, say-on-pay, claw-backs, and seemingly inevitable lawsuits that arise out of any kind of merger or acquisition are recurring concerns. As illustrated by SEC investigations prompted by Facebook posts from the CEO of Netflix, a company’s social media strategy has had to become a board-level issue, too. Throughout the day, various panelists commented that the natural inclination of most officers and directors is that their D&O insurance will protect them when a claim arises; but that may not always be the case, depending on what the relevant policy actually says.
Over the course of the day, several panelists touched on the difficulties of applying US-issued D&O policies to proceedings in other jurisdictions. Particularly in light of increased criminal and regulatory exposures abroad, panelists noted, more companies are looking to their D&O policies for a defense and indemnity. The trouble is that the terms of US-based coverage may not translate well into a different legal regime (particularly in civil law countries). For instance, what would often be the subject of mere civil litigation in the US can easily take the form of a criminal action elsewhere.
Particularly in an era of economic volatility, it is clear that D&O insurance remains an important risk mitigation strategy for companies of all types, public and private, domestic and international. There was near universal sentiment that D&O rates are likely to increase as the challenges that the coverage is called upon to address proliferate.