For brokers placing directors and officers (D&O) cover in mining and resources, the standard insurer reflex can be to stress-test the balance sheet, flag the cash burn and then exit the risk. The problem is that a solvency lens bears little resemblance to how junior miners, developers and producers actually operate. Juniors burn cash by design, developers load up on debt before earning a dollar and a commodity price shift can rewrite a feasibility study overnight. The brokers winning in this market are the ones working with underwriters who can read that feasibility study, sit across a table from a management team and stay on the risk from drill rig to production - rather than walking away the moment the financials look unconventional.
In Western Australia, it's a distinction that matters more than ever. WA’s resources sector attracted $33 billion in mining and petroleum investment in 2024-25, with a further $49 billion in committed projects under construction and a $122 billion pipeline in scoping and feasibility, much of it sitting with junior and mid-tier names whose risk profile shifts radically as projects move from exploration to development to production. Mineral exploration expenditure alone reached $2.57 billion in WA last financial year. Gold sales hit a record $29 billion. That is a lot of D&O risk moving through the system - and a lot of room for underwriters to misread it.
Jerome Steyn (pictured), senior underwriter for Markel Insurance in Perth, argues the textbook D&O approach simply doesn't fit the front end of the resources life-cycle.
"Junior miners is a good example of where specialist knowledge matters," he said, pointing out that explorers operate on a cash-burn model by design as they fund drilling and resource definition. Insurers without sector fluency, he said, default to an insolvency lens and walk - even though insolvency isn't the genuine pinch point for a well-run junior. The real exposures sit elsewhere: disclosure of resource estimates, market announcements, capital raising representations, and the management team's ability to deliver against a plan.
That risk profile changes again at the developer stage, Steyn said, when debt loads climb, capital raisings stack up and project fees balloon. Developers remain hostage to commodity price swings, which is why his underwriting focuses on how much margin a project carries before economics turn negative - a question a standard solvency screen rarely asks. By the time a company reaches production, the risk picture has shifted once more and so should the cover.
Brokers will recognise the macro backdrop. The Pacific region saw composite insurance rates fall around 10% in Q2 2025, and Australian D&O premium reductions of 15% to 40% have become common as fresh capacity from local and Lloyd's markets re-enters the segment. But that softening is uneven, with insurers segmenting hard by risk profile and loss history and ASIC's appetite for chasing boards over cyber, privacy and greenwashing probably keeping the volatility light flickering. For mining specifically, Lockton's 2025 Mining Market Update identifies tailings risks as the main cause of D&O claims globally - a reminder that the heaviest D&O losses in this sector rarely originate in the finance function.
Steyn’s view on the single most decisive factor influencing project risk may cut against industry orthodoxy.
"Our preference from an underwriting point of view is we'd rather have not such a great project but a great management team," he said.
A strong board and executive group can salvage a marginal project, redesign a feasibility study, recut the capital structure and keep disclosure clean. A weak team can blow up a world-class deposit and trigger the kind of class action that Australian D&O insurers most fear, given the country's place alongside the US and Canada as one of the most developed class-action jurisdictions in the world.
That is also why life-cycle underwriting matters. Steyn's approach is to see clients through from the "nursery" of exploration into the high-risk development phase and out the other side into production - rather than re-pricing, restricting or exiting each time the balance sheet shape changes. For brokers, that continuity is a selling point clients understand instinctively: a carrier that won't disappear at the first capital raise.
So brokers who can frame D&O cover as a life-cycle product - calibrated to exploration, development or production exposures and underwritten by people who have read the feasibility study - are better placed in a softening market where pricing alone won't differentiate. Marsh and others have urged brokers not to chase headline rate cuts at the expense of coverage. With tailings, ESG benchmarking, climate disclosure and regulator activism all in play, the wording matters as much as the premium.
