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D&O Risk & Liability 2019


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It is almost inconceivable that directors and officers (D&Os) operating in today’s increasingly regulated business landscape would neglect to arrange D&O liability insurance. Indeed, D&O cover has become a must-have in light of the personal risks they face. In recent years, companies, as well as their D&Os, have been required to adapt to a changing liability landscape. Gone are the days in which D&Os were only concerned about financial misrepresentation or corporate mismanagement; instead, today they now face potential liability risks from a variety of sources, as well as new regulatory exposures and increased enforcement from government agencies.



Rachel Turk


“An emboldened and highly competitive plaintiff bar in the US is leading to an increase in derivative litigation – where a plaintiff sues the directors and officers (D&Os) in the name of the company for breach of fiduciary duty. There has also been a rise in securities class actions in both federal and state courts, and inflated settlement demands for claims that would not previously have been pursued. The target defendant companies tend to be global, with operations in multiple jurisdictions, making litigation complex and costly, and resulting in increasing numbers of D&Os facing significant legal defence costs.”



Yves Hayaux-du-Tilly

Nader, Hayaux & Goebel

“The personal risks facing board members in Mexico have increased, particularly in the financial sector, due to the number of regulations that impose obligations on the directors and officers (D&Os) of financial institutions and public companies. Due to the challenging business environment, board members of such companies make decisions on a daily basis that could be considered mistakes or omissions that can cause losses to their companies, investors and third parties on a global scale. Evidence of the increase in board members’ personal risk is the number of insurance companies in Mexico that currently offer D&O products, such as ACE, AIG, Atlas, AXA-XL, GMX, QBE de México and Zurich.”



Ilan Goldberg

Chalfin, Goldberg, Vainboim & Fichtner Associated Lawyers

“Compared with the US and a number of developed European markets, D&O risk in Brazil is still new, particularly when it comes to litigation. From 2000 until 2010, the Brazilian market was quite soft, with the most notable change over the past near-decade coming about as a result of Operation ‘Car Wash’. Undoubtedly, the number of disputes related to D&O insurance is growing and gaining more attention among the media, companies, D&Os and the insurance market. All of the most important cases in Brazil deal with the anticipation of defence costs vis-à-vis the necessity of a final adjudication when a matter involves wilful misconduct by the insured.”



Catherina MacCabe


“C-suite directors today face significant and multiple personal risks. Traditionally, D&O risk was linked to financial misrepresentation or corporate mismanagement, whereas today, D&Os face a widening array of operational risks from three main areas: new exposures such as cyber, environmental, gender pay issues and increased regulation, a change in public perception and moral judgement resulting in increased scrutiny of senior management behaviour, and increased political intervention and pressure resulting in more individual D&O accountability.”



Virginie Frémat

CMS Legal

“Today, businesses operate in a climate of increased regulation, with greater exposures for both directors and the companies they manage. The European Union’s (EU’s) General Data Protection Regulation (GPDR) and environmental regulations are indicative of the growing regulatory burden on companies and their directors. In Belgium, there is an increased desire to hold directors accountable for their actions, which stems from the new insolvency legislation that entered into effect on 1 May 2018. Bankruptcy trustees are incentivised, through their remuneration schemes, to hold directors liable for mismanagement.”



Belén Vílchez Morales

Aon Risk Solutions

“The issue here is that there is no precise definition of D&O liabilities as such, resulting in new exposures arising continuously. Brexit is a hot topic, where directors may face increased liabilities if they fail in their performance, if results dip or as a result of a business interruption. Another source of increased risk is unregulated business, where matters mainly associated with technology, such as cryptocurrencies, artificial intelligence (AI) and cyber crime, are giving rise to exposures which had not previously been considered.”



Marcel Armon

Howden Germany

“The personal risks facing board members in Germany have significantly increased due to the enhanced requirements for adequate compliance management systems demanded by the government and the courts. In the spotlight are compliance systems with regard to anti-bribery measures, cartels, the European Union’s General Data Protection Regulation (GDPR) and anti-money laundering (AML) efforts. Executive board members may become targets of recourse litigation by the company if there is a deficient compliance management system, leading to financial losses in the form of administrative penalties and costly internal investigations.”



Georg Lett

DLA Piper

“After the financial crisis – and perhaps even before – we saw an increase in the number of cases, and with substantially higher amounts claimed. Several factors caused this. First, the introduction of a cap to the registration fee of a complaint with the court. Second, the increasing desire to place not only financial but also moral liability on D&Os. And third, the shift to a more risk-based assessment of the outlook for success, rather than a ‘life goes on’ attitude.”



Giovanna Aucone

PG Legal

“Today, a lot of directors and officers (D&Os) are confronted with liability claims arising from their connections with companies that have been declared bankrupt. Indeed, it has become an increasingly common course of action in insolvency proceedings to bring actions against former directors, officers and auditors.”



Carmen Elder

DLA Piper

“The business environment in Australia has become an increasingly difficult landscape for board members to navigate, with heightened expectations from regulators and greater emphasis on meeting community expectations impacting the standards of conduct required for good corporate governance. However, the types of risks faced by board members are largely unchanged. Personal liability, financial risk and reputational risk remain key areas of concern, but the ways in which those risks could materialise have broadened.”


Aon Risk Solutions


Chalfin, Goldberg, Vainboim & Fichtner Associated Lawyers

CMS Legal

DLA Piper

Howden Germany

PG Legal

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