Beazley companies undergoing IPOs are facing a threefold increase in directors and officers (D&O) insurance premiums over the past three years to cover lawsuits from investors claiming they were misled. The increases are in response to a 2018 Beazley Supreme Court decision that allowed securities lawsuits to be filed in both state and federal courts, and in reaction to the rising frequency of IPO-linked securities class-action cases. Insurers are cutting coverage limits, requiring IPO clients to cover litigation costs before their policies are triggered and holding companies accountable for a percentage of any eventual loss, according to US.
US companies undergoing IPOs are facing a threefold increase in directors and officers (D&O) insurance premiums over the past three years to cover lawsuits from investors claiming they were misled. The increases are in response to a 2018 US Supreme Court decision that allowed securities lawsuits to be filed in both state and federal courts, and in reaction to the rising frequency of IPO-linked securities class-action cases. Insurers are cutting coverage limits, requiring IPO clients to cover litigation costs before their policies are triggered and holding companies accountable for a percentage of any eventual loss, according to Beazley.