Class action litigation in the US and the growing economic uncertainty have created a surge in the demand for management liability insurance among the UK’s top firms, according to global broker Marsh.

According to Marsh, two years ago only 10% of London Stock Exchange’s 250 listed companies were buying directors’ and officers’ (D&O) insurance to protect the personal assets of their directors. Today, the figure is closer to 50%.

This demand is driven by the need to attract and retain high calibre candidates who increasingly require insurance indemnities.

Marsh says companies buying D&O cover are less concerned about price than ensuring that the terms and conditions of their cover are fit for purpose. Increasingly, this includes a much greater emphasis on the personal liability of directors.

In the US, class action litigation rose by 58% in 2008, even before the recent economic events on Wall Street.

Marsh estimates the premium value of the D&O market at $US8 billion ($10 billion) globally with the UK market standing at between $US1-2 billion ($1.2-2.5 billion).