Current Trends In D&O Insurance

A look at recent developments and current trends in the world of D&O insurance, from Kevin LaCroix, host of the online journal D&O Diary. He finds no major change in the frequency of securities class action, based on numbers from the first eight months of this year. A slight decline is likely attributable to a shift in plaintiff lawyer tactics with respect to merger objections, with more individual actions and fewer class actions.

He looks specifically at filings related to SPACs, Crypto, ESG issues, and Covid. Like the virus itself, Covid litigation is proving to be persistent and highly adaptive. For example, he says, we are now seeing cases targeting companies (including Amazon) “that prospered at the outset of the pandemic but whose fortunes flagged as the conditions resulting from the pandemic evolved.”

Another twist on what appeared to be a straight-line trend has occurred in ESG-related litigation. “Companies that have been pushing to burnish their ESG credentials could now find themselves caught in the middle of a politically charged firestorm,” LaCroix says. With regard to cybersecurity-related securities suits, plaintiff lawyers have not fared well, but may take heart from a judge’s recent refusal to dismiss claims in Solar Winds lawsuits.

As for pricing of D&O insurance, the hard market has softened a bit. Most D&O insurance buyers, he says, for the first time in years “will not see an increase at their next renewal and may see some improvement.”