Biotech companies are more prone than most to shareholder lawsuits because single events can often cause sharp and sudden price drops in their shares. While they buy insurance to protect their officers and directors from financial exposure, companies often do poorly to understand their actual risks. C3 Risk & Insurance Services has created “The Answer,” a proprietary database of 13,000 shareholder suits with 80 data points around each to guide companies in their coverage decisions. We spoke to Mike Milligan, managing director at C3 Risk & Insurance Services, about its shareholder lawsuit database, the insights it provides, and why who owns a stock is a much better indicator of a company’s risk of being sued than the size of a price drop.

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