Insurers are preparing for a wave of litigation against private credit directors and executives. Mounting concerns over illiquid asset valuations drive this legal preparation. The SEC is intensifying scrutiny of opaque valuation practices amid borrower defaults and redemption freezes.
Underwriters of Directors and Officers (D&O) liability insurance are increasing premiums and re-evaluating sector risks. Recent lawsuits against KKR and Blue Owl Capital ventures allege overstated asset values.
Private loans rely on internal models that investors frequently challenge during market downturns. Insurers anticipate rising claims for misrepresentation, inadequate risk disclosure, and breach of fiduciary duty.