Canadian D&O limits average Cdn $71 million

Canada’s average reported Directors & Officers (D&O) liability insurance limit was just under Cdn$71 million, according to a survey of 270 TSX/S&P companies.
Hunters International Insurance, a Toronto-based company, conducted the study. It found the highest reported overall D&O limit in 2006 was Cdn$333 million, while the lowest was Cdn$4.5 million.
“All of these figures are lower than last year,” Hunters said in a press release announcing the results of the survey. “The range in limits can be attributed to a number of factors, the most significant being the range in size of companies forming the TSX/S&P 300.”
According to Brooke Hunter, president of Hunters: “General risk and uncertainty in corporate Canada were put in marked relief with unexpected changes in income trust tax legislation announced Oct 31. We have only seen the first action under Bill 198 secondary market disclosure legislation relatively recently.
“Only the fullness of time will illuminate the impact of legislated risk on Canadian directors, officers and trustees.”
Canadian directors face a set of legislated statutory liabilities that go beyond their American counterparts, “which further highlights the need for a distinctly Canadian perspective of risk,” Hunters noted in its release.
Hunters’ second annual survey of D&O insurance in Canada collected the information about D&O Insurance from the management information circulars of a wide range of TSX traded companies.
Of the 270 corporations and trusts ranked, 176 disclosed D&O insurance limits in their most recent management information circular. “Bear in mind that disclosure of this form of insurance is not mandatory,” Hunter observed. “That said, of the Top 50 ranked corporations, 100% of them disclosed.”