Australian insurers have added more fuel to the fiery directors’ and officers’ (D&O) insurance debate. They are allegedly excluding liability for company collapses from D&O contracts. Aon’s Managing Principal for professional risks, John Grant, told the Australian Financial Review that the directors and officers of smaller and “riskier” companies will have the exclusion added to their policies.

This latest exclusion follows the trend to exclude employment practices liability from smaller companies’ policies where a director or officer has been involved in discrimination or unfair dismissal action.

The 2002 JP Morgan/Deloitte Touche Tohmatsu General Insurance Industry Survey mentioned a dramatic change in the wording of policies last year. The survey found 54% of respondents believed the wordings of D&O policies have become more restrictive.

The survey also showed a significant rise in D&O premiums of 32% compared to the 2001 results.