Plexus Partner and member of the FOIL Regulatory Sector Focus Team, Richard Salvini has recently contributed to an Insurance Times piece on the D&O market. The comments provide by Richard were as follows:
“Regulatory fines involving health and safety breaches have increased significantly over recent years and the impact of the Sentencing Guidelines has been widely reported. For example, the average levels of fine for large companies have increased to around £375,000 since February 2016. The cover for these cases are generally provided by Liability policies.
Additionally, there has also been an increased focus on individuals within defendant organisations including directors. Similarly levels of fine and penalties for these defendants have increased significantly. A safety incident can lead to a number of overlapping investigations involving multiple defendants including individuals, who typically require separate legal representation.
Those fines are uninsurable by law and Defendants are also exposed to increased media coverage and adverse publicity and associated reputational risk.
Therefore the support provided to individual defendants through insurers and D&O policies is invaluable at a time when they require legal advice, support and guidance when they are feeling vulnerable and in an unfamiliar situation.
Directors can take comfort that their costs will be covered by an appropriately worded D&O policy. It is very important and positive that the insurance industry increasingly recognises, as it does, the need for earlier legal representation for individuals (ideally prior to formal action arising). This provides the support needed by Directors from the outset and produces better outcomes to cases with improved earlier decision making and therefore reduced indemnity spend.”
The full article can be found at (subscription required) https://www.insurancetimes.co.uk/analysis/dando-market-has-to-fight-impulse-for-broad-brush-increases/1431961.article#plexuslaw
Richard Salvini, Partner
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