The potential reputational damage caused by litigation against directors and officers can have immediate and long-term impacts on the business, potentially eroding long-term sustainability.
Why are reputational and D&O risks increasing?
In challenging times, businesses look to their leaders for direction and support. Decisions made at leadership level are being amplified by:
- The development of technology: has enabled the global news networks to communicate in new ways. If legal action is taken against business leaders, social media can now deliver messages instantly, and amplify them across a global platform where perspectives can be made quickly and decisively, often with limited contextual information. As the organizations themselves have little control over the distribution of messages across social networks, this shifts the balance of power from companies to customers and other stakeholders.
- Environmental, social and governance: From climate change, to ethical working practices, to privacy and data management, business leaders’ commitment to the integration of ESG factors is now the hallmark of sustainability for marine organizations. Business leaders who actively pursue measures to support environmental protection, respect for human rights and corporate transparency are likely to be trusted by the public and by investors, reducing the risk of legal action against their decisions and actions.
Directors & Officers (D&O) covers the cost of compensation claims made against the organization’s directors and key managers (officers) for actions taken within the scope of their regular duties.
Invaluable individual coverage: D&O liability insurance provides executives with personal liability and financial loss protection from wrongful acts committed—or allegedly committed—in their capacity as corporate officers.