Hundreds of millions of dollars in insurance claims for corporate directors and officers involved in the investigation of manipulations of the Libor rate could push up the costs of directors and officers insurance for all companies, Reuters reports. Insurers fear that hefty claims from the scandal, which involves than a dozen global banks, will drive up costs at a time when coverage rates are already rising.
“We're going to be spending the next three-to-five years getting our heads around how much this is going to cost," one source told Reuters.
However, illegal actions invalidate D&O policies, so insurers may get a break if the authorities bring criminal charges against banks.
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