When a company is sold in an M&A deal, directors and officers remain exposed to claims with respect to activities pre-acquisition. Therefore, D&Os have a lot to worry about when their company is being sold. To protect themselves, D&Os on target boards should try to negotiate the purchase of a run-off D&O insurance policy with the acquiring company before the sale is complete, while they still have some bargaining power left.
Run-off policies are a one time purchase which last for a set duration (typically six years) and usually cannot be cancelled or amended once purchased. Sometimes D&Os will have … Continue Reading