In a one-on-one discussion with David Bradford, president, research and editorial group for Advisen, Galban says that over the years insurers have not had much success in their distribution of this product through large brokerage firms. Those brokers, with their focus on the Fortune 200 companies, feel that the low-premium levels they collect from the sale of these products is not worth their time and effort. But, considering the opportunities, he believes insurers should be turning more attention to independent agents.

“There are certain brokers who could see this as a good little business,” says Galban.

He says insurers have done a poor job of permeating this marketplace because they have not put the marketing in place to make it successful.

“Distribution is important in this business and [producers] need to accept low premium levels,” says Galban. “Service is important and you need to find ways to write lean and find the tools to write this in a less-expensive way.”

From a sales perspective, the major obstacle to selling this product is convincing a privately held company that they need the coverage. Executives at publicly held companies understand their exposure. For privately held companies, the exposure is not so apparent. But lawsuits holding the directors and officers responsible for a private company's actions do happen more often than one might think.

“They don't understand why they need it and resist buying,” says Galban.

The traditional hook, as he calls it, is “fear” and making clients understand the burden a D&O claim can have on their company's finances.

He compares private-sector D&O to cyber coverage. Companies say it can't happen to them. When it does, they see the cost and then understand the value of the policy.

Advisen's Bradford illustrated the potential marketplace for this coverage, saying that according to his firm's figures the current market in this segment has around $2.5 to $3 billion in written premium. But considering the number of privately held businesses that range from small corporations to partnerships, there is a potential $15 billion in written premium.

“There is an enormous amount of growth available,” says Bradford.

Turning to non-profits, they were termed as a much easier sale by Bradford because the boards are often comprised of sophisticated executives who understand their exposure.

“The non-profit market is more mature,” says Galban.

In another discussion moderated by Jeff Klenk, senior vice president Travelers, three brokers discussed the buying patterns they are seeing.

Dennis Donovan, executive vice president, S.H. Smith & Co., a wholesale broker, says independent agents have to do a better job of explaining to the customer that this coverage protects the balance sheet. He notes that business executives are under the illusion that their general-liability policy will protect them, and agents have to get customers to understand where they have exposures.