D&O Events Drastically Underreported

Hilary Tuttle


September 4, 2018

directors and officers insurance claimsAccording to Willis Towers Watson’s 2018 Management Liability (Directors and Officers) U.S. Survey, cyber incidents/claims (80%), claims by employees (55%), and regulatory and enforcement risks (48%) are the top concerns for directors and officers in the next year.

Lawsuits or demands by a current or former employee (55%) were the most common cause of losses for which buyers submitted a claim, followed by those from a customer (44%) and a cyber incident or breach (31%).

Willis Towers Watson was most surprised, however, by the sheer volume of unreported incidents overall. For example, of the 55% that experienced an employee lawsuit, only 34% of respondents filed a claim. This disparity was especially notable with regard to cyberrisk as well—31% experienced a cyber incident, yet only 7% submitted a claim, while 24% experienced an incident and never submitted.

As notification is typically required for coverage, the report’s authors questioned whether these disparities stem from actual gaps in coverage or in perceptions of whether coverage would respond.

Hilary Tuttle is managing editor of Risk Management.