Most employee errors are simple work-related mistakes that can be easily fixed. However, without the proper precautions in place some seemingly-innocent employee errors can lead to costly consequences. A minuscule error such as a typo in a contract or a program’s code or a missing signature on a document can turn out to have dramatic financial repercussions for a business if left unchecked.
Many employee errors are considered the result …
On the surface, it can be tough to tell the difference between directors & officers (D&O) and errors & omissions (E&O) insurance. Both policies, at their core, are designed to safeguard a business against losses from claims of negligent or malicious acts. However, this does not mean that the two policies are interchangeable. That is a common misconception, but the two policies each have distinct areas that they cover, and …
Directors & Officers (D&O) insurance provides liability coverage for managers and executives at companies to protect them against claims as a result of decisions and actions they take within the scope of their duties. A D&O policy can cover the personal liability of company directors and officers as individuals, reimburse the company in the event it has to pay the claim of a third party on behalf of its managers …
Help Minimize Potential for D&O Lawsuits Resulting from Cyber Attacks
On several occasions we’ve discussed the emerging risk of cyber for directors and officers and the need for executives and a company board to take the necessary steps to address and oversee their companies’ cyber risks. Although there is no case law outlining the extent of a director’s duty of care with respect to data security, it’s becoming increasingly more …
Shareholder and Employment-Related D&O Suits Also Top List
A survey of organizations on their Directors & Officers (D&O) insurance conducted by JLT Park indicates that regulatory claims are increasingly a top concern for corporations, alongside shareholder and employment-related suits. The companies that participated in the survey, which was taken between October 2013 and February 2014, include a broad array of industry segments, including manufacturing, insurance, financial services and energy and …
Reviewing Directors & Officers Insurance Policy DefinitionsDirectors and Officers (D&O) Liability insurance is needed to provide defense costs and pay for judgments against directors and officers, including board members, who are embroiled in allegations of wrongdoing connected with the business. But D&O policies are not easy, off-the-shelf products and the policy terms, scope of coverage, exclusions and available enhancements should be evaluated with a professional insurance advisor who works …
Recent Conference Highlights Emerging Cyber Risk for Directors & OfficersEarlier in June of this year, we wrote about the increased importance of the role by boards of directors in cyber security, brought to light in the wake of several high-profile data breach cases such as Target, and the call from SEC Commissioner Luis Aguilar in May for corporate boards to ensure they’re taking the necessary steps to address …
Lawsuits Underscore Importance of Board’s Fiduciary Adherence
A new report released by Cornerstone Research looked at shareholder litigation involving mergers and acquisitions deals from 2007-2013. The report cites that for the fourth consecutive year, shareholders filed suit against public companies in more than 90% of M&A deals valued over $100 million. Moreover, just last year, shareholders challenged 94% of these deals for a total of 612 lawsuits. Also, for the …
Review Directors & Officers Policy Language for CoverageThe U.S. Securities and Exchange Commission (SEC) in its annual report to Congress revealed that the number of whistle-blower tips and complaints under its program increased 7.9% from the previous year to 3,238 in fiscal year 2013. The SEC’s Office of the Whistleblower, mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, was established in August 2011 and since …
Board Members Bring Greater Accountability for OwnersIncreasingly more family businesses are choosing to incorporate a board of directors in their operation. Why form a board? A board of directors can serve a vital role in helping a family company navigate its future. In addition to having access to individuals with expertise in strategy and other high-level business issues, a board can provide greater accountability to the family owners and …
