The UK Government is expected to outline next month a proposed change in law that could increase exposure for D&O insurers.
The new proposals are expected to be unveiled at the opening of the next session of Parliament and will allow courts to award compensatory payments to victims of companies facing financial collapse as a result of the misconduct of their directors.
At present courts cannot award compensatory payments.
The proposed changes will also allow English courts to consider foreign criminal convictions against directors when deciding whether to disqualify those directors from controlling a locally regulated company.
The proposed legislation is expected to be announced on 4 June, but a draft bill will not be entered into the Commons until the next sitting of Parliament. So, even if the bill is approved, it will not be law for at least another year.