D&O Coverage Capacity: Argo Pro's Corporate Solutions Group

Providing Management Liability Capacity When Companies Need It Most

In a tightening market, brokers are looking for additional D&O coverage capacity for clients who’ve faced bankruptcy or securities class actions.

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By Craig Landi

The need for higher capacity D&O coverage is expected to increase, as companies dealing with a dearth of revenue and intense financial pressure face increased potential for Chapter 11 bankruptcy filing. The challenge for companies in these circumstances – and the brokers assisting them – is that they are seeking coverage at a time when many insurance companies are reducing their capacity or the limits they offer – sometimes dramatically.

Source: American Bankruptcy Institute  (July commercial filings and first half comparison).

Another factor driving the need for expanded D&O coverage is class action lawsuits, which are forecast to increase significantly.

Argo Pro has D&O coverage capacity – and is deploying it

Argo Pro has organized a team to offer the management liability coverage that distressed companies are seeking. These complicated policies are structured by our Corporate Solutions Group, a deeply experienced team comprising claims, counsel and other experts, to help companies with bankruptcy, post-bankruptcy, restructuring and post-EPL-claims situations.

Argo Pro offers essentially unencumbered capacity that we can deploy for companies that have filed for bankruptcy or have had a previous class action filed against them.

Why the D&O market is tightening

The market had been soft for much of the last 15 years, and as a result, D&O pricing was too low for a sustained period. Insurers thought it was profitable when in fact it wasn’t, and they were undercharging for coverage. The D&O Pricing Index published by Aon shows a 73% increase in the average cost of $1 million in D&O limits in the first quarter of 2020 compared to the prior year quarter.

With decreasing capacity and increasing demand for robust management liability coverage, there is no better time for brokers to ensure that policyholders have the most comprehensive and responsive coverage in place to manage their particular risk profile.

 Craig Landi is president of Argo Pro.

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