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5 reasons your private company should consider D&O insurance

5_D&OPrivate company leaders should not make the mistake in thinking they are protected from personal lawsuits simply because their company is not publicly traded. According to Chubb’s Private Company Risk Survey, 27% of private companies experienced a D&O lawsuit over the previous decade, compared to 33% of public companies. And in 2013, the cost of a lawsuit against a director or officer of a private company was an average of nearly $700,000. Despite such risks as costly lawsuits, government fines, and more, a large percentage of company leaders are not taking steps to protect themselves. So, before you write it off entirely, keep these 5 factors in mind.

  1. The threat of lawsuits
    Private companies are statistically less likely to be sued in comparison to public companies, but a few instances stand out:

    • Creditor suits. If your private company were to go bankrupt, there is a chance creditors could sue. D&O insurance would protect the personal assets of company leadership from these creditor lawsuits.

    Read more…

As demand for wind turbines grows, take steps to mitigate risk

WindFarmSunsetFrom California to New York, wind turbine farms are popping up all over the country. The United States is second only to China in terms of installed wind power capacity, and the demand is increasing. Georgetown, Texas, with a population of 50,000 people, will be the first city in the Lone Star state to be completely powered by renewable energy. Why? Because, according to a U.S. Energy Department analysis, wind power will be less expensive than electricity produced from natural gas within the next 10 years, even without a federal tax incentive.

Wind farms provided 4.5 percent of U.S. power supplies in 2013. If that number increased to 35 percent by 2050, power prices would decrease and result in $400 billion in benefits related to reduced emissions of greenhouse gases, Bloomberg reports. Additional benefits include reduced water consumption by the power industry, 600,000 new jobs, and a drop in air pollution. Read more…

Misclassifying independent contractors could cost you

hailingacabAs the economy changes, we have seen an increased use of “independent contractors” in all areas of business as a way to try and reduce employer expenses.

Let’s take ride-sharing startups Uber Technologies Inc. and Lyft Inc. as an example. A job as an Uber driver has many benefits. Drivers are their own bosses with the luxury of making their own schedules. But as independent contractors, they are responsible for myriad expenses. After car maintenance, gas, insurance, and taxes, plus a 20 percent commission to Uber, the driver’s pay is cut nearly in half, according to The Washington Post. In recent lawsuits filed in San Francisco, drivers claim the ride-sharing companies have been mislabeling them as independent contractors according to California’s labor law. The National Council on Compensation Insurance (NCCI) notes that if drivers were declared employees and therefore entitled to workers comp benefits, there would be no disputing which policy – commercial or personal – would cover auto accidents. Additionally, as the employer, Uber would be responsible for covering fuel costs and other work-related benefits like paid sick leave and vacation days. Read more…

Cyberliability governance – early guidance for corporate directors

wyndham_lockWhen confidential personal or medical information is compromised or a computer network is breached, the event is typically described as a “failure” of data or network security. That is not an attractive characterization in realms where blame is assigned. Facing predicted increases in cyber-related shareholder lawsuits, corporate boards and their legal advisers have sought to determine what corporate directors and officers must do to avoid the personal liability that can result from shareholder claims. In an earlier blog post and white paper, I discussed the changing D&O risks associated with cybersecurity exposures. WGA’s Cyber Risk Hub also has an extensive section on cybersecurity corporate governance. Read more…

Prioritize cybersecurity – liabilities could fall to D&Os

March 20, 2015 Leave a comment

d-and-o_cyber

On Tuesday, Premera Blue Cross announced the health insurer fell victim to a security breach that exposed medical and financial information of 11 million customers – the most devastating cyber-attack in the health care industry to date. If this latest breach tells us anything, it’s that the necessity for cyber coverage has never been more essential. A recent study from the Ponemon Institute found that 43 percent of companies have suffered a data breach in the past year. Yet despite these numbers, a whopping 70 percent of security professionals consider their organizations safe from cyber-attacks, according to a separate survey published this week. These findings suggest not only a false sense of security among IT departments, but that many directors and officers may not realize their obligations related to cybersecurity.
Read more…

Rising healthcare industry brings stand-alone tail coverage to mind

March 19, 2015 Leave a comment

money_healthWhile technology, energy and other industry sectors often capture the headlines in the financial press and in the media, health care companies are a major economic force within the U.S. economy and growing. According to The World Bank, health care spending between 2010 and 2014 accounted for nearly 18% of U.S. GDP. This number is only expected to grow in the decade ahead. While some have argued that the PPACA will slow this trend, I find little evidence that it will do so in any meaningful fashion. All of this means that health care dollars spent in the U.S. will claim an increasing portion of our GDP. Read more…

Snow removal vital in preventing slip and fall case liablity

snow_ice02In addition to worrying about potential storm damages from this season’s record snowfall, New England property owners need to be aware of a recent decision in Massachusetts case law which changes the way that courts look at weather-related slip and fall incidents.

For many years, Massachusetts courts based decisions surrounding slip and fall accidents in regards to whether the cause of the fall was due to natural accumulation of snow and ice. In basic terms, if the property owner took precautions to remove snow in a reasonable manner, then the law would find in their favor. Read more…

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