Brokers have warned the cost of insuring directors could rise by 50% if the government's report by Derek Higgs is implemented.

The Higgs report concluded that companies should be able to indemnify directors against proceedings, without trying to establish in advance the prospects of success.

The cost of directors' and officers' (D&O) cover has spiralled in recent years as US-style claims against directors have escalated.

Biba chief executive Mike Williams told FT.com that insurers use policy wordings that allow them to screen cases.

He said: "If the government, however indirectly, insists that directors be covered against all claims, insurers will say: OK, but that has to be reflected in the pricing."

Williams insisted D&O cover could rise by another 50% if the government insisted insurers offer blanket coverage.

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