Mactavish: Brexit deal defeat piles pressure on liability risks
Written by staff reporter
A bad Brexit is likely to lead to heightened business interruption risks, and a surge in D&O claims, many of which will be rejected by insurers, according to Mactavish CEO, Bruce Hepburn.
“Directors of listed UK companies face major liability risks for failing to prepare adequately for Brexit, especially if there is a ‘no deal’ outcome,” he said, reiterating his earlier warning that UK directors may have overlooked new liabilities that could leave them exposed personally to legal action because of traditional limitations applied to D&O insurance cover.
“Looking at the longer term, the regulatory disruption caused by Brexit will leave large swathes of uncertainty for many years as to the details of new regimes applying on a sector by sector basis. This will increase the risk of unanticipated regulatory action or censure – a key area of D&O insurance cover,” he added. “Unless a company’s D&O policy has been specifically reviewed and negotiated, it is unlikely to be reliable because there will likely be far too many exclusions to cover and ‘outs’ for insurers, and as the market hardens more such arguments will be taken by insurers.”