Insights

The Options Scandal and the D&O Insurance Response

January 1, 2007

Management Liability/D&O

The director and officer liability insurance industry was as surprised as everyone else by the recent options backdating scandal. D&O carriers had never previously considered improper option accounting, and therefore few, if any, D&O policies contained explicit provisions addressing options backdating. Since the scandal first hit, however, D&O insurance carriers have had a chance to assess their exposure, consider their coverage position under the language of existing policies, and determine how they will treat improper option accounting issues going forward. In general, most D&O insurance carriers have been reasonable and evenhanded in their response. This article discusses those the backdating issue and the D&O insurance response.

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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