Judy Blades, a Best's Review columnist, wrote that D&O underwriters today apply diligence and attention to identifying which companies adhere to high governance and integrity standards.
D&O insurers face challenges in executive compensation where there have been company restatements and shareholder lawsuits. In a claims-made policy, D&O insurance responds to a claim at the time it is filed, not when the alleged misdeed was committed. Insurers might pay defense costs in cases where company officers and directors are individually sued or are under formal regulatory inquiry.
Underwriters would review the public filings to seek compensation answers, but officers prepared with complete facts around options grants, accounting treatments and internal controls are more likely to be rewarded in pricing and terms.
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