A study on directors' and officers' (D&O) liability insurance premiums revealed a huge increase from 2002 to 2003.
Directors' and officers' (D&O) liability insurance premiums increased approximately 33% on average from 2002 to 2003.
Findings of the Tillinghast business of Towers Perrin's 2003 Directors' & Officers' Liability Survey also revealed employee lawsuits were significant for all types of respondents. Entities with more than 500 shareholders saw most of their claims come from shareholders.
Despite record premium increases during the year, the 2003 D&O Premium Index indicates that the market started stabilizing toward the end of 2003 with premium increases beginning to level off.
Tillinghast's survey, which included 2,139 participants, is the 26th in a series of studies on D&O liability claims and insurance purchasing patterns and the only study of its type.
The 2003 D&O Premium Index median and average premiums were the highest ever reported by survey participants, with 70% of U.S. respondents reporting an increase in premiums from a prior policy and only 19% reporting a decrease. Signs of stabilisation occurred toward the end of the year, with 62% of U.S. participants with renewals reporting a premium increase in the third quarter, compared with 76% in the third quarter of 2002.
