Insights

Video: D&O Insurance, Silicon Valley, the SEC and Big Data

November 4, 2014

Management Liability/D&O

In a recent interview for “Broker Beat” on BusinessInsurance.com, the associate editor, Bill Kenealy, and I talked about the state of the D&O insurance, special considerations for Silicon Valley and general regulatory trends not to be ignored as we move into 2015.

You can view the 5-minute video here Here are some highlights from the interview …

The D&O Insurance Market for Buyers

“What does the market look like for buyers of D&O coverage right now?”

The market for D&O insurance is much better now than it was this time last year. Carriers are stronger, and as a consequence, we’ve seen prices flatten, and terms continue to be good.

But buyer beware of this hot topic: self-insured retention terms. As insurance carriers become savvier with big data analytics, they’re using it to better calibrate where they want to provide coverage and just how much that self-insured retention should be.

Further reading:

  • Be sure to review our latest report that forecasts what Ds and Os need to consider in 2015.
  • If you’re with a private company, you can brush up on the ABCs of D&O insurance, including information on self-insured retentions.
  • Also check out this post on four ways to maximize your recovery in D&O insurance claims.

Special Considerations for Silicon Valley

“Any interesting quirks considering the mix of companies out in the San Francisco area in terms of D&O insurance?”

Two words describe the landscape here in Silicon Valley: Innovative and disruptive. The business climate in the Bay Area carries with it incredible innovation that presents both an upside and risk – and it’s not just in technology and life science companies; innovation is happening in all sectors, from retail and social media to transportation and finance.

Here in Silicon Valley, change often happens at a very fast pace, and with it, comes certain challenges for insurance. And, regardless of location, companies are especially focused on cyber risk coverage as a board-level issue.

Regulatory Trends – What to Prep For

“Anything afoot on the regulatory front that buyers of D&O should be aware of?”

For both private and public companies, be aware that the U.S. Securities and Exchange Commission (SEC) is very active right now. SEC Chair Mary Jo White has made it clear that the SEC will not tolerate any wrongdoings, and in fact, expects corporations to disclose upfront any questionable acts and fully cooperate with the SEC during investigation.

This effort will also be enhanced by the recent 2014 U.S. Supreme Court Lawson decision that clarified that whistleblower protections apply to employees of private companies that blow the whistle on public companies they serve.

Consider, too, that if you’re a director or officer at a multinational company, illegal acts of bribery abroad will come home to roost. Recent cases in this arena have shed light on the matter, and it’s important to comply with recent Supreme Court rulings on the FCPA as well as other anti-bribery laws.

Public companies: It’s time to get your house in order for 2015 and ensure you’re following basic regulatory compliance to a T. This includes things like filing forms under Section 16(a), and doing so in a timely manner, and ensuring that material non-public information is not compromised in any way – including within your own home.

For more reading on these issues, check out:

  • Eavesdropping and Insider Trading”
  • “SEC to Insiders: When We Say File Your Section 16(a) Forms, We Mean It

And now that we’re heading into the new year, it wouldn’t be a bad idea for directors and officers to familiarize themselves with the enforcement direction of SEC in 2015.

 

The views expressed in this blog are solely those of the author. This blog should not be taken as insurance or legal advice for your particular situation. Questions? Comments? Concerns? Email: phuskins@woodruffsawyer.com.

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All views expressed in this article are the author’s own and do not necessarily represent the position of Woodruff-Sawyer & Co.

Priya Cherian Huskins

Senior Vice President, Management Liability

Editor, Management Liability/D&O

Priya is a recognized expert and frequent speaker on D&O liability risk and its mitigation. In addition to consulting on D&O insurance, she counsels clients on corporate governance matters, including ways to reduce their exposure to shareholder lawsuits and regulatory investigations. Priya serves on the board of an S&P 500 public company and a large private company and has an impressive list of publications, speaking engagements, and awards for her influence and expertise in the industry. 

415.402.6527

LinkedIn

Priya Cherian Huskins

Senior Vice President, Management Liability

Editor, Management Liability/D&O

Priya is a recognized expert and frequent speaker on D&O liability risk and its mitigation. In addition to consulting on D&O insurance, she counsels clients on corporate governance matters, including ways to reduce their exposure to shareholder lawsuits and regulatory investigations. Priya serves on the board of an S&P 500 public company and a large private company and has an impressive list of publications, speaking engagements, and awards for her influence and expertise in the industry. 

415.402.6527

LinkedIn