Securities Litigation and D&O Insurance: Do You Really Know the Exposure?
Securities litigation has become the "Wild West" according to defense lawyers. The duopoly of Milberg Weiss and Lerach Coughlin was broken in 2008, unleashing a hoard of newly energized plaintiffs' attorneys, all vying to be the biggest and baddest gunslinger in town. Advocating novel theories of liability - often designed to circumvent the higher pleading standards of federal securities class action suits - law firms are staking a claim on the post-Lerach and Weiss securities litigation landscape. Traditional securities class action suits accounted for less than half of new securities litigation in 2008, while suits alleging common law torts, breach of fiduciary duty and violation of previously rarely-cited securities laws have become more common. Defense costs are surging as plaintiffs' lawyers concoct new strategies to avoid dismissals and to prevent suits from being consolidated.
Advisen's new 38-page report, Securities Litigation in 2008: Implications for the D&O Market in 2009 and Beyond, examines not only securities class action suits, but the full array of securities suits that are transforming the D&O market. It examines the legal, political and economic forces reshaping securities litigation, and assesses their impact on fundamental D&O underwriting and pricing assumptions. Additionally, it examines the D&O market within the broader context of the commercial insurance market, and demonstrates how exogenous events such as a hyperactive year for natural catastrophes in 2008 will contribute to a turn in the D&O pricing cycle in 2009.
The Advisen report contains new research but follows a series of Advisen research papers detailing the impact of the subprime and credit crisis on the D&O market. The running tally by Advisen now shows more than 660 major lawsuits from this global economic trauma including 148 securities class actions. The report discusses where dismissal rates are going, where plaintiff's lawyers are taking new cases, the types of complaints being filed, and how an increasing number of lawsuits may trigger coverage under E&O policies. It also offers insight into the dozens of suits filed in response to Bernard Madoff's alleged $50 billion Ponzi scheme, and analyzes the impact of skyrocketing bankruptcies on D&O insurers.
Get the full report to get raw data, commentary and analysis you can use. To be more informed in planning for 2009 and beyond, purchase the complete report for $249 by clicking "Order Report" below.
The report provides summary counts of cases and breakouts by industry and other filters. Readers interested in creating their own lists of cases may do so for a small fee by e-mailing corner@advisen.com and including MSCAd in the subject line.
MSCAd is part of the Advisen.com workstation which provides business and insurance information on over 13,000,000 companies; 2,700 policy forms; 271,000 insurance program benchmarks and also provides predictive risk models. Subscribers to Advisen.com are more informed and are able to translate this knowledge into increased customer retention and new business. For information on these services, Contact Advisen at corner@advisen.com and enter "info" in the subject line.
This report was written by Dave Bradford, Executive Vice President and Editor-in-Chief, dbradford@advisen.com, +1.212.897.4776. Thanks to Bill Brown, Jim Blinn, Mason Power and Tom Ruggieri for their contributions.
Get the full report to get raw data, commentary and analysis you can use. To be more informed in planning for 2009 and beyond, purchase the complete report for $249 by clicking "Order Report" below.
