Why D&O Insurance Premiums Have Dropped Since 2021
In this episode of The SPAC Podcast, Machua Millett, Chief Innovation Officer at Lockton Companies, explains how the Directors & Officers (D&O) insurance landscape for SPACs and de-SPACs has evolved since the 2021 boom.
Following a surge in SPAC IPOs, deal volume, and resulting litigation, insurance premiums spiked sharply in 2021. At their peak, SPAC-related policies were among the most expensive in the public company space. But according to Machua, that environment has shifted dramatically. Premiums and deductibles have dropped by as much as 60–70%, and coverage terms have improved making this a more favorable market for sponsors, targets, and their boards.
For anyone managing risk during a SPAC IPO or de-SPAC transaction, this clip offers a timely and practical snapshot of current conditions in the D&O market.
Connect with the Guest:
Machua Millett – Chief Innovation Officer, Lockton Companies
LinkedIn: https://www.linkedin.com/in/machuamillett/
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https://www.thespacpodcast.com/guests/machua-millett/
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Michael Blankenship LinkedIn:
https://www.linkedin.com/in/mikeblankenship/
Joshua Wilson LinkedIn:
https://www.linkedin.com/in/joshuabrucewilson/
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The views, opinions, and statements expressed by the guest are solely their own and do not necessarily reflect the views of The SPAC Podcast, its hosts, or affiliated organizations. This content is for informational purposes only and should not be construed as investment, legal, tax, or accounting advice.
Disclaimers:
The views, opinions, and statements expressed by the guest are solely their own and do not necessarily reflect the views of The SPAC Podcast, its hosts, or affiliated organizations. This content is for informational purposes only and should not be construed as investment, legal, tax, or accounting advice.
Michael J. Blankenship is a licensed attorney and is a partner at Winston & Strawn LLP. Joshua Wilson is a licensed Florida real estate broker and holds FINRA Series 79 and Series 63 licensure. The content of this podcast is intended for informational and educational purposes only and should not be interpreted as legal, financial, or compliance advice. The views and opinions expressed by the hosts and guests are their own and do not necessarily reflect the official policies or positions of any regulatory agency, law firm, employer, or organization.
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Let’s Connect on LinkedIn:
👉 Michael J. Blankenship - https://www.linkedin.com/in/mikeblankenship/
👉 ...
Michael Blankenship:
Great. Well, let’s start with the basics. How has the D&O insurance landscape evolved for SPACs over the last few years, especially post-2021?
Machua Millett:
There was definitely an inflection point in 2021. D&O insurance for SPACs and de-SPACs reached historically high premiums around that time. SPACs had traditionally been viewed as a quiet risk but with the volume of IPOs, liquidations, and deal closings, plus an uptick in litigation, insurers saw more exposure and prices skyrocketed.
Since then, the market has softened dramatically. Premiums and deductibles have come down significantly. There’s also more coverage availability, especially for SPAC IPOs and de-SPAC transactions both for the target and the sponsor.
All in, we’ve seen a 60–70% decrease in premiums, along with improved terms and lower retention. It’s a very different and more favorable landscape today.
CINO and Alternative Investment Practice Leader
Mach specializes in policy drafting, program placement and claims advocacy regarding management and professional liability insurance issues for private equity, venture capital, and hedge funds and private and public companies. He is responsible for overseeing technical insurance policy drafting for our General Partner Liability and portfolio company D&O books, as well as guiding private companies through the insurance aspects of the traditional Initial Public Offering (IPO), SPAC IPO, and de-SPAC processes. He is also a senior claims and coverage resource for our alternative investment fund and private and public company clients when they have a claims dispute.
Mach’s background is as a general commercial litigator, securities class action defense attorney and insurance coverage lawyer. Before becoming an insurance broker, he spent ten years defending alternative investment firms and private and public companies against regulatory investigations, derivative and class action securities suits, general commercial lawsuits and insurance coverage actions at Bingham McCutchen, Skadden Arps and Edwards Wildman.
Mach was born in Nicaragua, and grew up in Nicaragua and Costa Rica before coming to the United States. He graduated from New Lebanon Junior/Senior High School as a National Merit Scholar, summa cum laude from Tufts University, and Harvard Law School. He lives outside of Boston, MA with his wife and two boys.