AIG Europe has substantially enhanced its directors and officers cover in response to the Turnbull recommendations on corporate governance.

The improvements come against a background of soft market conditions which means providers can afford to add value to products in the search for new customers. AIG has added no fewer than 19 upgrades to its existing policy.

The insurer, which last year saw a 35% increase in the number of policies sold, said the D&O policy changes are meant to ensure companies are equipped if they fall foul of the new corporate governance environment.

Poor corporate governance has been a catchphrase for company directors since the 1992 Cadbury Report heralded a review into the responsibilities of senior company personnel.

The key changes are cover for punitive and exemplary damages; a broadening of the insured v insured carve outs; an expansion of cover to include claims against insured acting as directors, officers, trustees and governors of outside entities and a broadening of the definition of directors and officers to include past, present and future directors and officers.

There is also an extension to the length of discovery periods and an automatic six-year run-off period for retired directors if the policyholder does not renew.

Finally, there is a crisis management support package included for all policyholders at no extra cost.

"The Turnbull guidance reinforces the need for every broad to establish its own policies and controls for sound risk management," said AIG Europe UK's Chris Townsend who is vice president of the insurer's financial lines division.

"We understand these increasing responsibilities and obligations on directors and we are confident that our policy offers the best available D&O protection."

AIG Europe is also providing a free guide called "Effective Risk Management Post Turnbull". To obtain a copy ring 0171-280-8993.