Making tough choices is inevitable when you own or manage a business. The coronavirus pandemic has been a perfect example of how sometimes these decisions must be made with limited information and under tight deadlines - circumstances that can make the decision process more complicated and lead to unfavorable results or mistakes.
Regardless of your company's size, there is always a chance that litigation could arise from your management decisions. Directors & Officers (D&O) claims are more of a severity issue than frequency as most businesses will not have a D&O claim arise. The cost of defending a claim alone can be substantial, crippling your business financially and putting the board member's personal assets at risk, which are reasons to have D&O liability part of your insurance program.
Directors & Officers Liability

Lawsuits can be filed against your company, each executive and director, or all. These suits can originate from your customers, creditors, competitors, suppliers, vendors, government and regulatory agencies, current or former employees, or even investors. These exposures are not just for publicly traded companies. The following elaborate on risks of non-profits and privately-owned business:

It is important to remember that family-owned businesses are not immune to these risks. How they manage their business can equally be the basis of lawsuits. Since family and business goals can become intertwined, decisions may be made for nonbusiness reasons that do not maximize their shareholders’ welfare. Whether shareholders are family or non-family members, they can hold all directors and officers of the company liable.

As the business, legal, and regulatory landscapes evolve, so too does the D&O risk of business owners.
Insurance Protection

 Businesses secure D irectors and officers (D&O) liability insurance to help protect their entity and executives from costly legal actions.

An organization’s unique attributes and risks will determine the extent of D&O insurance coverage needed. The coverage selected impacts the costs along with other underwriting considerations.

Following are the three key coverage segments:
  • Side A: This coverage protects directors and officers when indemnification is not available. For example, if the company goes bankrupt during a lawsuit, this coverage would protect directors’ and officers’ personal assets.

  • Side B: This coverage reimburses a company’s indemnification obligations.

  • Side C: This coverage protects the company itself in the case of a lawsuit.

Since D&O forms can vary, it is crucial to analyze the exclusions to assure the protection aligns with the risks of your business.

Besides the financial consequences at the time of a claim, the lack of a D&O insurance policy may deter individuals from seeking an executive position or sitting on a non-profit board, as they do not want to put their personal assets at risk in the event of a lawsuit.
The U.S. Department of Homeland Security (DHS) has announced that the exemption for the physical inspection of Form I-9 documents has been extended to Aug. 19, 2020. According to the DHS, this will serve as the final extension.  Read more
Employers across the country are implementing initiatives to help employees manage caregiving responsibilities during the pandemic as it still remains on unclear when and how children will be returning to school. Read more
The new Massachusetts travel order, effective 8/1/20, requires residents that have traveled to states other than defined "Lower Risk States" to quarantine for 14 days or produce a negative COVID-19 test result that was administered within 72 hours of returning to MA. This would impact your employee's ability to return to work. For complete exemptions and details visit  MA COVID-19 Travel Order.
As many employers still have some level of their team working remotely, we will continue to provide tools relating to the remote workforce:

With businesses resuming operations, many are seeking candidates to fill their positions. The hiring process is just another aspect that has been impacted by COVID-19. For some industries, career fairs were a perfect opportunity to connect with future employees. If these have resumed, they have done so virtually along with many steps of the recruiting process. Read more
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