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https://www.insurancejournal.com/news/national/2020/06/15/572191.htm

Companies Press Insurance Brokers for Workarounds to Rising D&O Costs

2020-06-15 00:00:00, , Jun

Content Categorization
/Business & Industrial
/News/Business News

Word Count:
1157

Words/Sentence:
36

Reading Time:
11.57 min

Reading Quality:
Advanced

Readability:
16th or higher

Media Sentiment
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In January, Tesla's insurer paid out $60 million to settle investor claims that directors allowed Musk to dupe the company into overpaying for solar panel maker Solar City.

Tesla didn't respond to emails seeking comment on Musk's D&O arrangement.

Tesla's board may be expensive to insure, given Musk's Twitter missteps and run-ins with regulators, and his new insurance setup creates the potential for conflicts of interest.

A volatile stock market generally translates into more securities class actions, but the breadth of the market's decline might make it harder to prove it was a company's response to the virus that caused its travails, Travelers Cos.

CEO Alan Schnitzer said in April.

Rates Rising

In the meantime, rates on D&O policies in the U.S. rose 44% in the first quarter from a year earlier, with 95% of clients experiencing an increase, according to a report by Marsh.

The inquiries she's received haven't necessarily translated into action, she said.

Musk may be at the leading edge here, as he is in electric cars and space travel, but don't expect a "stampede," said McBride, whose five boards include Blue Bell Creameries.

Keywords
tesla D&O

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