Australian directors involved in overseas expansion need to check the scope of their directors’ and officers’ (D&O) policies carefully, according to Marsh.

The broker says many D&O policies aren’t adequate to deal with the complexities of international mergers and acquisitions, particularly in relation to delays in repatriating claims, currency exchange losses, unfavourable tax conditions and the emergence of US-style litigation in emerging markets.

Clayton Utz’s Insurance and Risk Practice Head Peter Mann, a leading D&O specialist, says inadequate D&O policies can also be a problem for companies investing in Australia.

“I’ve seen it more from the opposite point of view, where you have overseas corporations entered into a D&O liability policy on a global basis and those policies don’t necessarily respond as well as local policies,” he told insuranceNEWS.com.au.

“There’s been a fair degree of competition between D&O insurers in Australia. There are more D&O cases in higher courts testing coverage here than in the UK, and that testing results frequently in insurers looking at the scope and cover they should offer.”