Risk Management » Banking Crisis and D&O

Banking Crisis and D&O


April 6, 2023

The federal takeover of Silicon Valley Bank and Signature Bank will have some impact on the cost and availability of D&O coverage in the financial sector, but not a dramatic one. D&O has been softening recently, and the banking industry’s troubles may slow that trend. Banks should expect sharp questioning by insurers at renewal. Other banks might be looking at the kind of putative class actions that SVB and Signature are facing, as will venture capital companies, cryptocurrency companies, and their associates including attorneys and advisers, who also may be forced to defend D&O-related litigation. Derivative lawsuits that charge directors with breaching their fiduciary duties, and lawsuits by regulators are also likely. However, if current insurers leave the market, new ones are likely to step in. D&O insurers will be assessing the role social media has played in the crisis.

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