July 9, 2004

D&O Insurance Rates Falling

Last year, there was a great deal of concern over the rising costs of directors and officers ("D&O") insurance. According to an article in the Silicon Valley/San Jose Business Journal (via MSNBC), however, the pendulum has swung the other way. Rates began declining in April of this year and "now many companies are saving between 18 percent and 50 percent." The article attributes most of the decline to rate competition caused by new underwriters entering the market. (Thanks to the Securities Law Beacon for the link.)

Quote of note: "Those getting the biggest break are stable, middle-market public companies, between $500 million and $1 billion in market cap. This group was hit as hard as anyone when D&O rates started increasing in 2001. Until rates started easing earlier this year, some companies saw increases as high as 300 percent."

Posted by Lyle Roberts at July 9, 2004 10:17 PM | TrackBack
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