(Recasts with D&O insurance, adds background, comment from
Gallagher, Praedicat, Mayer Brown)
By Carolyn Cohn
LONDON, Aug 10 (Reuters) - Premiums for directors' and
officers' liability insurance surged in the second quarter,
broker Marsh said on Monday, as insurance underwriters fear the
coronavirus pandemic will lead to hefty litigation claims.
Premiums for directors' liability insurance, known as D&O,
in Britain rose by more than 100%, while in the United States,
rates for public companies were up by 59%, Marsh said in a
quarterly commercial insurance survey.
D&O insurance protects company directors and executives
against litigation costs.
Jonathan Turner, CEO for speciality insurance at broker
Gallagher, said D&O rates for public companies seen as
particularly exposed to COVID-19 legal claims had risen by as
much as 2,000%.
Risk modelling company Praedicat said that by mid-July, more
than 200 claims had been filed in U.S. courts against companies
allegedly responsible for introducing and spreading COVID-19 in
the United States.
James Whitaker, a partner at law firm Mayer Brown in London,
said similar litigation was likely to follow in Britain.
Marsh's survey found that overall, global commercial
insurance rates rose 19% in the second quarter.
The rate rise was the highest since Marsh began its
commercial insurance rates survey in 2012.
"As insurers continue to work through claims in property and
D&O, and with the full cost of COVID-19 still developing, upward
pressure on pricing is anticipated for the balance of 2020,"
Dean Klisura, President, Global Placement and Advisory at Marsh,
said.
Lloyd's of London estimates non-life insurers globally will
pay $100 billion in COVID-19-related claims this year.
Marsh said other large losses had also triggered premium
rate rises, with insurance industry sources seeing more to come.
Insurance industry sources estimated insured losses of
around $3 billion from the explosion at the Beirut port
warehouse last week. Risk modelling firm Karen Clark estimated
insured losses of more than $4 billion from Hurricane Isaias,
which hit the United States and Caribbean over the past few
weeks.
(Reporting by Carolyn Cohn; editing by Simon Jessop and Jane
Merriman)