Complex and challenging times for Directors and Officers
Guiding a business through the current problems created by COVID-19 is the immediate concern for Directors and Officers (D&O), however, future planning is also a priority with key decisions having to be made under pressure.
The impact of the pandemic has initiated an even more challenging business environment for Directors and Officers, as they attempt to manage risks in an uncertain market.
Consequently, COVID-19 is accelerating pressures on Directors and Officers in what A. M Best, the US based credit ratings and financial data company, described as an “increasingly complex and interconnected business environment.” A report for A.M Best highlighted that rates for the D&O insurance market jumped by 44 percent in the 2020 first quarter.
Industry experts believe that in the current economic climate, high-risk business profiles include general healthcare, technology, and life sciences while management capabilities are being put under the microscope in areas such as personnel, supply chain management, financial stability, refinancing, and the security of internal data systems.
While lawsuits involving employees remain a significant aspect of D&O protection, breaches of fiduciary duties are another aspect of business practice that carries the potential risk of legal action with the real threat of personal liability for executives who have not taken out adequate insurance, particularly in the event of bankruptcy.
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 Richard Bowdidge at firstname.lastname@example.org or on 0203 713 3982.
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