Survey Shows No Problem With D&o Insurance
The Age
Tuesday June 25, 2002
A survey of several publicly listed technology and Internet stocks by The Age has shown that although insurance premiums for directors and officeholders (D&O insurance) are rising rapidly, no board has been refused coverage.
A spokesman for the Australian Stock Exchange said yesterday that no other company had signalled it was facing a loss of insurance cover for its directors.
``It is fairly unusual. It's not something that we have heard from other (listed) companies," the ASX spokesman said.
One chief executive, who declined to be named, said securing the necessary D&O insurance was not a problem despite the turmoil in the insurance sector since the collapse of HIH Insurance, Australia's top professional indemnity insurer.
He said premiums had spiked from 25 to 50 per cent since HIH's demise, but he was confident the D&O insurance for himself and his board would be renewed.
VeCommerce managing director Paul Magee said premium increases were no surprise but he did not expect the tech sector to become untouchable when it came to D&O insurance coverage.
One insurance insider said some technology development companies could find it hard to secure coverage because of the speculative nature of the industry, but that apart from major indiscretions by directors it should not be impossible to obtain insurance.
© 2002 The Age