2.5 Foreign Filers As a class of business, foreign filers trading in the United States historically enjoyed lower pricing for their D&O insurance than domestic filers. In 2019, that all changed. The increasing number of lawsuits and the cost of
41% Increase in Filings Against Foreign Companies 250 202 cases
200 150
143 cases
100 50 0
First 5 Years (2009 to 2013)
Last 5 Years (2014 to 2018)
settlements for foreign filers finally caught up with the market. The result? Dramatic increases in the cost of D&O insurance. There is no reason to expect D&O insurance prices for foreign filers to decrease in 2020.
2.6 #MeToo 2018 saw the explosion of the #MeToo Movement in corporate America—and the movement has continued to march on in 2019. Boards have had to move swiftly to address the issues. Some corporations have been sued; others have "merely" had to deal with significant workforce disruptions—including, in one notable case, the massive and well-publicized Google walkout. #MeToo has even had an impact in M&A. To avoid inadvertently acquiring a difficult problem, buyers are now asking for the inclusion of a "Weinstein Clause," by which they mean representations that a company does not have a #MeToo-type problem lurking beneath the surface. The representations and warranties insurance market has responded by offering coverage for this exposure.
2.7 ESG and Politics in the Boardroom "ESG" is shorthand for environmental, social, and governance issues. As other commentators have noted, investor interest in these issues has reached a tipping point.
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