Marsh has announced several enhancements to its directors and officers liability (D&O) insurance offerings that it says could enable more clients to benefit from superior environmental, social, and governance (ESG) frameworks.
The company says there is now a greater willingness among D&O underwriters to recognise organisations with strong ESG risk management as safer bets.
American International Group, Berkshire Hathaway Specialty Insurance, Sompo International, Starr Insurance Companies, The Hartford, and Zurich have agreed to participate in Marsh’s ESG D&O initiative, in which US-listed clients that engage with select international law firms to review and validate their ESG frameworks, will be considered for preferred D&O policy terms.
Enhancements may include explicit coverage for chief sustainability officers, increased limit for independent board directors, and coverage for related fines and penalties.
ESG has consequences for a number of insurance lines, including D&O insurance, which is designed to respond to shareholder, derivative, and event-driven litigation, as well as regulatory actions.
Broker Marsh has introduced new “Side D” entity coverage for regulatory investigation costs relating to climate-related financial disclosures. It is now also available to clients that are not publicly traded in the US that score highly using established ESG risk methodologies.
Paul Denny, Global Financial and Professional Liability Practice Leader at Marsh Specialty, said: “Interest in our D&O ESG initiatives has been incredible. More insurers see the connection between good ESG risk management and fewer or less severe D&O losses and are willing to recognize those with superior frameworks with better coverage.”
“This is great news for our clients, many of which have made building a strong ESG framework a priority for their organizations.”
