A Warning on Cost of Executive Insurance

A Nasdaq Stock Market Inc. subsidiary is warning public companies that probes into possible manipulation of executive stock options might push up the cost of insuring their executives and board members against lawsuits.

Carpenter Moore, a division of Nasdaq Insurance Agency that acts as an insurance broker for companies on the exchange, said in an undated memorandum that some insurers were already seeking to limit their liability under so-called directors’ and officers’ coverage. Insurers are already raising premiums and setting more restrictive terms, the memo said.

At least 35 companies are the subject of criminal, regulatory or internal probes into whether they manipulated or falsified dates on stock options granted to executives. More than a dozen top officers, including five chief executives, have lost their jobs amid the investigations.