Backdating's Long Shadow

Either decision would leave shareholders footing the bill entirely for fines or lawsuits resulting from the backdating scandal.

"If [companies] are not able to show that [they haven't done any backdating], I would expect that kind of behavior," says Steve Shappell, managing director of the legal and claims practice at the financial services group of Aon, an insurance brokerage.

But even companies not caught up in the scandal might feel its effect. Insurers are likely to pursue more restrictive clauses about backdating across the board, warned Doernberg in his note to clients.

"Some insurers ... may try to impose or negotiate wording that would make it more likely that one or more of the standard policy exclusions will be triggered in the event of a claim," he said. "Small differences in policy wording can have an enormous impact on the availability and extent of coverage in option-grant claims and in many other types of claims."

And Doyle warned that depending on how widespread the options scandal turns out to be, companies across the board could face higher premiums on their D&O policies. Although such premiums have declined in recent years, the backdating scandal is just one more risk that insurers face in an environment where companies already face increased scrutiny, he said.

"There' s probably more uncertainty [about corporate insurance claims] right now than ever before," he said. Assuming the backdating scandal is widespread, "it absolutely will have an effect on price, and terms and conditions as well."

However, other insurance experts doubt the scandal will affect general corporate premiums. There's still a lot of competition in the market to underwrite directors' and officers' insurance, and prices have declined in recent years, notes Shappell.

But even Shappell acknowledges that some insurers may take a broader-brush approach in writing policies this year as a result of the scandal. Instead of just targeting specific companies, the industry may try to raise rates on sectors considered more at risk, such as the technology sector, which has seen the bulk of the backdating investigations to date, he says.

"This is one more issue where you're going to have to spend time preparing for meetings with underwriters to explain that you are not at risk," Shappell says.