Directors and officers liability (hereinafter D&O) serves as a deterrent to corporate wrongdoing. Recent cycles of corporate scandal have impacted the tools used to manage the risk that D&O liability creates. The impact of these scandals is a "shock," which is a sudden event that alters the market profoundly. Market alteration has counter intuitively resulted in increased availability of D&O insurance at a lower price, despite an increase in D&O liability. With increased D&O coverage offerings at lower costs, the market has become soft, making coverage readily available. Carriers are competing for insureds and there is now a risk of undermining the deterrent effect that D&O liability provides. This paper explores whether D&O liability's deterrent effect has been jeopardized in this soft D&O insurance market
Nancy R. Mansfield, Joan T.A. Gabel, Kathleen A. McCullough, and Stephen G. Fier,
The Shocking Impact of Corporate Scandal on Directors' and Officers' Liability,
20 U. Miami Bus. L. Rev.
Available at: http://repository.law.miami.edu/umblr/vol20/iss2/4