When Tesla revealed last week that Elon Musk had stepped in to provide personal liability insurance for the company’s directors, after it balked at paying the soaring premiums demanded by traditional insurers, many other US companies would have wished they had a billionaire founder who could do the same.
The average cost of “directors and officers” insurance has almost doubled in the past two years, meaning a basic but essential product that once was a formality for public companies has become a financial headache.
Insurers, meanwhile, have been frustrated with corporate executives and boards after having to foot the bill for a wave of settlements over alleged conflicts of interest in everything from merger and acquisition deals and stock price drops to cyber breaches, #metoo claims and other misconduct that could be traced to the highest levels of a company.