Roughly a year after carriers started unveiling directors and officers insurance policy enhancements to cover costs of informal regulatory investigations, the add-ons are now widely available, and the price of the coverage is dropping, brokers say.

The first generation of informal-cost coverage came when Chartis included "pre-claim inquiry" coverage in a D&O product called Executive Edge last May. Before that, only formal investigations against directors and officers were covered.

Prior to the Chartis coverage, "[someone] had to be named in an SEC (Securities and Exchange Commission) investigation," says Phil Norton, vice chair for the Midwest Region at A.J. Gallagher in Chicago. With informal-cost coverage, "the industry is trying to go backwards in time—to start coverage earlier," he says.

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