Thursday, 7 May 2009

Climate Change, a D&O Loss Event?

Firms on the wrong side of the environmental movement have seen an enormous amount of suits filed against them, and plaintiffs have sought compensation from many forms of insurance policies, including directors & officers insurance.

Advisen Front Page News (here) carried an interesting article this week from the Chief Counsel to ACE Professional Risks, Carol Zacharias, who recapped the state of play in climate change litigation and how it increases the exposure to companies and their directors and officers.

Excerpting from the article:

The new cases address the adequacy of a company’s assessment of the financial
consequences of climate changes and the adequacy of disclosures to shareholders
of that financial impact. Since questions regarding disclosures to shareholders
raise the prospect of management liability exposure, these developments present
liability risks to directors and officers that should be considered.

Click here for the full article.

So I searched Advisen's large loss database for "climate change disclosure" and found a match on a case where Xcel Energy settled with the Attorney General of New York. Excerpting from our case profile:
Attorney General Andrew M. Cuomo today announced the first-ever binding and
enforceable agreement requiring a major national energy company to disclose the
financial risks that climate change poses to its investors. Cuomo's agreement
with Xcel Energy (NYSE: XEL) ("Xcel") comes as many power companies, including
Xcel, are investing in new coal-burning power generation that will significantly
contribute to global warming emissions.

Certainly climate change disclosure is not going to decrease under the Obama administration.

To get your hands on this case or other cases you want to follow, click here and indicate you want everything we have on climate change or whatever search criteria fits your needs.

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