Securities class-action litigation remains a challenge for companies and their directors and officers, growing in both frequency and severity in recent years. These claims can cost companies hundreds of millions — or even billions — of dollars in damages and defense fees combined. And, they can divert resources from the daily running of your business.
As the number of securities class actions and derivative claims increase, it is critical that you take steps to protect your company — and the personal assets of your directors and officers — from potential risks.
Purchasing insurance that responds as expected to protect the personal assets of directors and officers and your company’s balance sheet is crucial. A properly structured directors and officers liability (D&O) policy may provide coverage for multiple risks.
It is important to be aware that D&O policies typically contain a number of terms and conditions related to the proper reporting of claims or potential claims, the defense of the litigation, and the ultimate claims settlement. Most insurers have formalized claimshandling procedures outside of the actual policy — known as litigation management guidelines — that must also be followed.
The intricacies related to D&O insurance policy obligations can further complicate securities claims. It is imperative that policyholders understand their obligations under the policy to avoid limiting coverage.
No two D&O claims are the same. That’s why Marsh takes a collaborative approach to claims advocacy, working closely with you and your outside counsel to help resolve claims in line with your company’s expectations. Our team of advocates has deep and longstanding relationships with insurers. We maximize D&O insurance recoveries for our clients by combining our expertise and collaborating with insurers to achieve the optimal results.
Before, during, and after a securities class-action suit is filed against your company, Marsh’s FINPRO claims advocates can help you better understand claim trends and processes to ensure your directors and officers have protection when it is needed most.
Our experienced specialists will advocate on your behalf to maximize insurance recovery, and assist you through the claims process. Our team will focus on all insurance aspects of the claim, allowing your outside counsel to focus on the underlying securities claim, helping you save time, maximize insurance recovery, and mitigate potential tension with insurers for future renewals.
A technology company and several of its directors and officers were sued in a combined securities class-action/derivative action emanating from a transaction. The company, as well as the individual defendants, faced several insurance coverage issues, including whether a “differences in conditions coverage” event had occurred that would require several excess insurers to contribute to a settlement. The excess insurers were liable only in the event that the allegations against the individual defendants were deemed to be non-indemnifiable.
Marsh negotiated a resolution that resulted in tens of millions of dollars of insurance limits contributed from several insurers as a component of the overall settlement amount. The company settled for more than $200 million.
Marsh’s FINPRO claims advocacy team will support you in the event of a loss. Our team is made up of 15 claims advocates, all attorneys by background, with 8 claims professionals supporting them. Download the brochure to learn more about how Marsh's team can help you.