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Article: The price of prominence; Directors and officers insurance.
- Article from:
- The Economist (US)
- Article date:
- January 15, 2005
CopyrightCOPYRIGHT 2005 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Insuring America's corporate bigwigs may become more expensive
WHEN a company and its directors are sued for mismanagement or worse, who pays for the settlement? Usually, an insurance company. Each year, America's biggest firms spend a few million dollars apiece on premiums to cover their directors and officers in case disgruntled shareholders, employees or regulators take them to court. During the first six months of last year, claims worth more than $1 billion were paid by (or came due from) insurers who write directors and officers (D&O) coverage, according to Willis, an insurance broker.
Although directors are used to being sued, they are not in the ...