Companies are going without directors' and officers' (D&O) cover rather than pay increased premiums, Airmic has warned in its new market overview.

Meanwhile, brokers have failed their clients and the lack of all classes of cover has created a "terminal" situation for more companies than was currently estimated, Airmic added.

The survey was put together from members' input into the risk management association's special interest groups.

Airmic chief executive David Gamble said in the survey that purchasers of D&O were suffering because of the dominance of US companies such as AIG and Chubb.

"They are inflating premiums worldwide on the back of poor US claims and the devastating fallout of corporate black holes, such as Enron and Worldcom," he said.

"This means the rest of the world is picking up the bill for US corporate greed, criminality and incompetence."

The overview also criticised brokers, saying they should do more to help their clients.

"Brokers are finding the conditions very difficult because of the limitations of capacity, but they are failing to seize the opportunity to be creative and to add to the market's competitiveness," Gamble said.

He said this had created a situation more dangerous than was currently recognised.

"We have evidence of MDs [managing directors] and FDs [financial directors] reviewing costs and saying that, as there were no claims or real problems last year, why bother with insurance," he said.