Covid-19 leaves company directors and officers increasingly exposed
The ramifications of the Covid-19 pandemic is leaving company directors and officers increasingly exposed to potential litigation risks.
Typically, Directors and Officers (D&O) insurance is viewed as necessary to protect companies against lawsuits by shareholders. In the current difficult economic climate even small companies could find themselves embroiled in litigation involving, for example, regulators, customers, vendors and competitors.
The majority of private company lawsuits are employee-related matters, however, it should be recognised that a private company’s officers can be sued for breaching fiduciary duties.
Bankruptcy, where executives are made liable, is a mounting concern as the pandemic continues to have a major impact, particularly in situations where the company is unable to indemnify them. Industry experts are predicting bankruptcies around the globe will be up by 35% by the end of 2021.
Cybersecurity is another area where companies need to be aware of the risks created by new technology while insolvency claims, class actions, data breaches, climate change and environmental issues have also become factors.
Clearly, Directors and Officers need to fully understand their liabilities and identify the emerging risks that now face companies in this most challenging of times.
W Denis Insurance Brokers has a dedicated ProFin team, based in London, that can offer specialist technical advice on management liability issues. To discuss this further with an expert at W Denis, please make arrangements with firstname.lastname@example.org and on 0044 (0)113 2439812
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