Directors’ Liability Survey Report April 2022

Welcome to the 2022 Directors Liability Survey Report from WTW in partnership with Clyde & Co LLP. Last year, we produced our first international survey report. This year we have expanded the scope further with responses from directors and risk managers based in more than 40 countries around the world. As a result, we can now compare results from G.B., the U.S., Latin America, Europe, Asia and Australia.

The geographic spread of the respondents to our survey can be seen below along with their broad industry distribution.

Industry distribution

Source: 9^th Directors & Officers liability Insurance Survey

Responses by country

Source: 9^th Directors & Officers liability Insurance Survey

We have also enhanced the survey to include:

• More questions regarding Climate Change risk for directors focusing down on the different aspects of physical risk, transition risk and risks arising from climate change reporting requirements.
• A further cyber-related risk: cyber extortion. This risk provoked a strong response from respondents, immediately becoming a Top 5 risk across all regions.
• Questions exploring to what extent the respondents’ businesses have implemented captive insurance vehicles or other alternatives to the commercial D&O insurance.

Some interesting results have emerged from the new questions. Despite the increased attention on climate change risks following COP26 and recent regulatory changes, it still remains outside the top 5 risks in any region. However, it has risen to be the number six risk for directors in G.B., Asia and Australasia and when looked at by industry grouping, climate change does make it into the top 5 for finance and insurance, as well as for energy & utilities.

Our question regarding the use of “captives” and alternative risk transfer solutions highlighted that up to 20% of respondents said that their businesses were considering implementation of alternatives in the future and the highest of the implemented alternatives was a personal guarantee of directors liabilities from a CEO, major shareholder or other source.

The increased international scope of the survey allows for interesting comparisons of the regional responses. One particular area where this can be seen is in the D&O insurance limits being purchased by the respondents’ businesses. In LatAm, we can see that 19% purchased no D&O insurance compared with 0-8% for respondents across the other regions. By contrast, in Europe 28% and in North America 31% of respondents purchased €/$100+ million.

Given the international nature of the responses to this survey, in addition to articles covering specific topics, we have also included for the first time regional overviews in addition to the review of the overall top 5 risks kindly undertaken by James Cooper at Clyde & Co. The report only touches the surface of the data which we have collected and should you wish any further information, please do get in touch.

Download the report to:

• Delve into the views expressed by directors and risk managers from across the globe.
• Discover the impact of cyber-attacks and data breaches to your organisation.
• Find out the top topics that you should be aware of including climate change as they move quickly to the top of the agenda.