Given the volatility of today’s economy, many policyholders are considering switching insurers. While changing providers can lead to coverage gaps no matter the line, searching for new D&O insurance is particularly perilous. If you are planning to explore the D&O market, there are several factors to keep in mind.
First, be sure to tailor any new policy to your business. It is difficult to determine the right amount of coverage when buying D&O insurance. Though the usual concern is whether a company has sufficient coverage, some people go overboard and buy coverage they do not need. Privately held companies and other nonpublic organizations, for example, do not have the same shareholder derivative action exposure as public companies. But many pay high premiums to insure a nonexistant risk.