Massive rise in UK directors' cover
Premiums for insuring UK company directors have soared by as much as 1000% in some cases, fuelled by the increasing number of lawsuits being filed both home and in the US.
A survey undertaken by Marsh, the world’s biggest insurance broker, found that the massive increase in director’s cover followed similar rises in the US on the back of multi-million lawsuits following the spate of accounting scandals headed by Enron.
Toby Foster, chief executive of Marsh’s UK retail operations, said any company that got away with a 100% increase should count themselves lucky, adding that increases of between 300% to 400% were more the norm, the FT reported.
At present, 15 former directors of Equitable Life are being sued for £3.5bn by the life insurer’s new board, while four senior executive of DIY chain Wickes spent £20m successfully defending themselves in a long-running case.