With lawsuits looming on all sides, companies are bolstering their defenses with more generous helpings of directors and officers liability insurance.
Twenty-one percent of companies say they have increased their D&O limits, according to Towers Watson's 2010 D&O survey, vs. just 12% who said they had increased their D&O limits in the previous survey, in 2008. Just 3% of companies say they've decreased their D&O limits, unchanged from 2008.
A survey by insurance consultancy Advisen found there were 1,196 securities lawsuits filed in 2010, besting the record set in 2009, as suits related to mergers and acquisitions and events like the Deepwater Horizon oil spill replaced the credit crisis suits filed in recent years.
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Towers Watson surveyed almost 500 companies, about half of which have international operations. Among companies that operate internationally, 47% say they have purchased local D&O policies in foreign countries in 2010, up from just 2% in 2008.
The survey also shows that 78% of public companies bought excess Side A coverage, which kicks in if a company can't indemnify directors for lawsuits filed against them. That's considerably higher than the number that had purchased excess Side A in the 2008 survey.
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