Covering all the bases - Business First of Louisville:

http://www.pujckymix.cz/user_detail.php?u=lingimmiple
Directors and officers insurance, also known as D&O, "ise protection from lawsuits arising out of management saidKristen Hamilton, account executive at Acordia of Kentuckyh Inc., a local affiliate of Chicago-based Acordia Inc., whicj has more than $6 billion in annual "The insurance isn't going to keep you from getting Hamilton said. "But instead of using your retainefd earnings to pay for your you use aninsurance policy, so D&O protectz the personal assets of an organization's officers and directors.
" Executivese at several Louisville-area insurance agencies say the dramatic increas e in D&O premiums is being driven by a rise in lawsuitsz from shareholders dissatisfied with investment "They want to blame somebody," Hamilton said. Another factor, local executives has been the Enron debacle andothed high-profile corporate scandals. Because of those Congress passed the Public Company Accounting and Investor Protectioh Actof 2002, also known as the Sarbanes-Oxley Act, which set new rules for corporate conducyt and the relationship among directors, attorneys, analysts and accountants.
"Sarbanes-Oxley kind of turnefd things topsy-turvy," said Bill Stiglitz, accountt executive at Louisville-based HBH Insurance with 15 employees and morethan $50 million in The law and the scandals created a heightenef awareness of the possibility of lawsuitsw and "weeded out a lot of the ancillaryy insurers in the D&O market," Stiglitz "The big guys are still there (such as AIG The Hartford Financial Services Group Fireman's Fund Insurance Co. and Chubb Groupp of Insurance Cos.), but they're swamped," he "And premiums have gone through the roof for many publiclygtraded companies.
" But Stiglitz and othefr Louisville insurance executives said there is good news for many local companies and nonprofit organizations that need the Their premiums probably are not among those undergoingg the most dramatic increases, and there are stepsw companies can take to make sure they are getting the best deal on D& O coverage. The steepest increases primarily have take n placeat large, publicly held Hamilton said. "The corporations that have $25 $50 (million) or $100 million in receiptsd -- their policies went up dramatically," she said.
"Aw lot of the companies we deal withhave $2 (million) to $4 and their policies went up only 10 or 15 "Today, there is much more differentiation (in premium increases) between a larger Fortune 200 company and a small-cap company," agreedd Andy Bryant, manager in the Louisvilled office of Warren, N.J.-based Chubb Group of Insurance Cos. "Thw increases are just in two different worlds. You're looking at aboutf 10 or 20 percent onour small-cap Some small-caps even saw no increase, he Privately held companies, in particular, have not been subjectecd to high premiums, said Steve Thompson, principal at Sterling G. Thompson Co.
, an independent Louisville-basesd insurance agency with 32 employeesz andabout $50 million in "Privately held companies haven't been affected that much becauser you don't see near as many shareholder actionss against them as you do againstf publicly held companies," Thompson But at private businesses, therew may be an increasing awareness of a need for Last November, the Chubb Group sponsorerd a national survey of 300 privately held companies; it found that nearlyh two in five said it's likelhy their directors and officers will be sued by customers or vendors in 2004.
Local insurance executives said they have not seen dramatic increases in the number of companieswantingf D&O insurance.