The dynamics of the global economy will continue to offer opportunities complicated by additional layers of regulation, financial and market risk. Establishing effective strategies through risk transfer is more important than ever to conserve cash flow and prepare for future opportunities. Once risk is understood and quantified, it could be accepted or transferred on a fully funded or self-funded basis by an insurance program. The allocation of funds for the purchase of insurance must be done to maximize the breath of coverage with the confidence to potentially access the proceeds of the policy with reliability if needed.
Liability insurance for management risks remains relatively affordable even with increased regulatory incursions, and increased employment and securities class action litigation. Paying close attention to insurance concerns as economic, regulatory and trade practices evolve is challenging and we have found to be often overlooked. In the present climate, the mandate to insurance purchasers may be to buy “more” for “less” after evaluating alternative program options. Self-insurance alternatives with high retentions and reinsurance in place for excess limits as well as captive insurance programs can be attractive options.
Actuarial experts will identify what you should be paying and not just what the market offers. Distinguishing your company from the competition and highlighting the positive to differentiate your enterprise requires the expertise and experience of Million Insurance. We understand the complex nature of today’s business risk climate. We serve healthcare, Technology and Service organizations; public, private and non-profit.
Directors and Officers (D&O) Liability
Directors and officers of corporations face unparalleled scrutiny in today’s complicated, ever-changing regulatory and legal climate.
The Directors & Officers Liability (D&O) insurance product provides coverage to officers and board members for damages (settlements or awards) and defense costs that arise from lawsuits alleging various wrongful acts, including:
• Actual or alleged management errors or omissions
• Any misrepresentation, misleading statement or misleading action
• Neglect or breach of duties by the individual directors and officers
Board members are obligated to act in good faith and in the best interests of the company. They can be held personally and individually responsible for their action, or lack of action, in managing a company. They are vulnerable to lawsuits based on a number of grounds, including (but not limited to) the following:
• Inaccurate or inadequate disclosure
• Wrongful employee termination
• Decisions regarding mergers or acquisitions
• Discriminatory practices
• Breach of duty to minority shareholders
• Deceptive trade practices or anti-trust actions
• Mismanagement of funds
• Conflicts of interest
• Unwarranted compensation
• Misleading financial reporting
Professional Liability/Errors and Omissions Insurance
Cyber Liability/Technology E&O
Most businesses have experienced data security breaches. The Federal Bureau of Investigations, identity theft is the fastest-growing white-collar crime in America. Over 40 states require that individuals (customers, employees, citizens, students, etc.) are notified if their confidential or personal data has been lost, stolen, or compromised. The emergence of state privacy laws, various federal laws (HIPPA, ACA, Federal Trade Commission Regulations, Securities Exchange Commission), and foreign laws have created increased awareness of identity theft.
As such, there has been a rise in class action suits and regulatory actions are becoming more commonplace. The security and safeguarding of information is paramount to protecting an organization from embarrassment, reputational damage, financial loss, regulatory intervention and even public boycotting. The depth and breadth of the potential costs and expenses from a breach are still developing and not fully known. What we do know is that organizations have already incurred significant cost and expense, from legal fees, credit-monitoring for individuals, reparations, fines, penalties and redress funds. We are still in the process of uncovering and understanding the current and evolving cyber world phenomena.
The Employee Retirement Income Security Act of 1974 (ERISA) contains laws and regulations that protect the assets of employee benefit plans. Under the laws of ERISA, individual plan managers (fiduciaries) are held personally liable as a result of their negligence in the administration or management of employee benefit plans. ERISA specifically prohibits those responsible for managing employee benefits plans from transferring their personal liability to others. However, ERISA does permit fiduciaries and/or the Plan to transfer the risk of loss via the purchase of insurance.Most executives would not consider working for an organization without adequate D&O insurance coverage. Yet the same concern is often missing when it comes to ERISA-related fiduciary coverage.The Employment Retirement Income Security Act of 1974 (ERISA) holds the company and its fiduciaries personally liable for losses to the company's benefit plans by reason of a breach of duties. An administrative error or omission on the part of the fiduciaries of employee benefit plans can result in a lawsuit, one which could be devastating to your business as well as to the personal financial stability of your fiduciaries. In the event of significant outsourcing of the management of your company's benefit plans, there is no reduction in fiduciary liability whatsoever, those officers selecting the outsource firm will be held liable for their decision to outsource, their selection of that particular firm, and any claims arising from that firm's activities on behalf of the client company.
Employment Practices Liability
Recent legislation and legal developments have contributed to an increased potential for employment related litigation. Employees are more aware about their rights and the potential to initiate litigation at a nominal cost by the plaintiffs’ bar. The emergence of new exposures and new types of claimants has led to record levels of claims in both terms of frequency and severity.