In the following guest post, Angus Duncan of Willis Towers Watson summarizes the result of the 2021 Willis Towers Watson D&O Liability Survey. I would like to thank Angus for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Angus’s article.


On 22 April 2021, Willis Towers Watson published our latest D&O Liability survey, in partnership with Clyde & Co LLP (here).  The survey targeted directors and risk managers across the UK, the US, APAC and Western Europe (although we also received a small number of responses from LATAM as well).

The top 5 risks identified by the respondents were, in order, Cyber-attack, Data loss, Regulatory risk, Health & Safety and Risk of Employment Claims.


It should be no surprise to anyone that Cyber-attack and Data loss were the top two risks – this has been the position for the last three surveys conducted by WTW (albeit that it is interesting to reflect that the international position is consistent with the results of our previous surveys).  The COVID-19 pandemic has only heightened the exposure that companies have to these areas with so much more home working.

One very useful aspect of this survey has been the ability to compare the results across different regions, industries and company sizes.  Looking at Cyber-attack, in particular, there is a stark difference in the proportion of respondents who considered this to be a “very significant” or “extremely significant” risk:  72% in Europe, compared with 54% in the UK, 52% in the US and only 42% in APAC.  There could be many reasons behind this difference but our commentators noted that the General Data Protection Regulation could be a big factor here – with many countries across Europe seeing fines starting to be imposed by the regulators.

On the other hand, what might be equally as notable is that Data Loss was only the number two risk in Europe and the UK, for APAC and the US, it wasn’t even in the top 3.

Turning to the rest of the top 5 risks, as expected we continue to see Regulatory risk right up there.  Regulatory risk has been in the top 5 since we started undertaking these surveys – indeed, until 2018, it was the top risk identified by the survey responses.  Anyone who is involved in looking at D&O risk will be aware of the increasing focus of regulators on directors.  Ever since the financial crisis, more and more regulators have started to see individual exposure as the path to changing corporate culture.  In the UK, directors of financial institutions have been the subjects of this change for several years now, following the gradual spread of the Senior Managers & Certification Regimes.  Directors in other areas are also increasingly subject to regulatory exposure, with changes in law in the Pensions Schemes Act and with the proposals for the new Audit, Reporting and Governance Authority which is expressly intended to expand directors’ responsibilities, and exposures, for companies’ financial statements.

The position in APAC is similar, with increasing numbers of enforcement actions following the release of the Final Report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.  In the US, the focus on individual accountability has been in evidence for years, with the UK only now perhaps about to catch-up with Sarbanes-Oxley-type reporting obligations.  The SEC and DOJ continue to stress individual accountability and target individuals and our commentators expect this to continue under the Biden Administration.

The remaining two risks in the top 5 identified by the survey respondents are Health & Safety and Risk of Employment Claims.  Given the COVID-19 Pandemic, it is to be expected that these risks would shoot up the priority list for directors and risk managers.  Of course, with 2020 also seeing huge social upheaval, particularly in the US with the #BlackLivesMatter movement, it isn’t just COVID-19 that may be bearing on directors’ and risk managers’ minds when looking at the risks of employment claims.

What we can say, however, is that despite these being key areas of concern for the respondents to the survey, that has not yet been replicated into claims.  Willis Towers Watson’s claims data indicates a slight drop in EPL notifications in 2020 compared with 2018 and 2019.  So, an understandable concern and one for which the claims may still have time to materialise, particularly as more businesses start to return to office spaces and issues of whether companies can require vaccination start to bite.



It is, in some ways, just as interesting to see what the survey respondents did not consider to be high priorities.  In particular, the risk of insolvency, bankruptcy or corporate collapse.  Given the stress that COVID-19 lockdown measures have put on so many businesses, there has been an incredible amount of speculation of a veritable ‘tsunami’ of insolvencies/bankruptcies.  However, this is simply not reflected in the concerns identified by the respondents to our survey.  Overall, nearly 63% of respondents considered that the risk of insolvency, bankruptcy or corporate collapse was either “not at all significant” or only “somewhat significant”.  Moreover, in smaller companies, this was even more exaggerated, with nearly 86% of respondents in companies with revenues of less than $/£/€10 million considering that the risk was either “not at all significant” or only “somewhat significant”.

It is simply not possible in an overview article like this to summarise all of the points made in the report and I do recommend that people take the opportunity to read the report.  However, bearing in mind that this article has been prepared specifically for D&O Diary, it would be remiss of me not to mention the specific D&O insurance questions which we asked of the respondents.

The hard market has made its way into the directors and risk managers awareness, with 71% aware of the changes to a “moderate” or “great” extent.  64% had seen an increase in premium, while only 30% had seen a reduction in policy limit.  The latter is an interesting statistic given notable reductions in capacity available in the market over the past two to three years.



We also asked respondents to comment on the importance of various aspects of their insurance policy, with interesting differences in priorities relating to coverage for pre-litigation expenses. On the one hand, for directors and risk managers, coverage for the cost of a public relations expert was the lowest ranked issue. This form of coverage most often triggers upon a crisis event, such as a restatement or product recall. On the other hand, having cover for the cost of legal advice at the early stage of an investigation was ranked as the second-most important after how claims will be controlled and settled. This would appear to demonstrate the importance of having robust policy provisions for either pre-investigation costs or a wide enough definition of investigation to ensure that the policy is triggered early on.  It will be interesting to see whether the refinements to coverage that insurers seek in this challenging market ultimately lead to a divergence with the cover that directors and risk managers are looking to buy.


Angus Duncan

Executive Director – FINEX GB D&O Coverage Specialist

Willis Towers Watson 

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