Professional and Management Liability Risk Types
Directors & Officers Liability and Entity Coverage (D&O)
Protects the financial assets of the company and the directors and officers against lawsuits.
Typical Risks of Emerging Companies
- Emerging companies, often backed by venture capital have increased risk for claims by minority shareholders in connection with a merger or sale agreement.
- Successful companies can trigger lawsuits from early or prior stakeholders in the company disputing their payout relative to other stakeholders.
- Hiring employees from a competitor could attract lawsuits from that competitor.
- Companies being acquired are at risk for lawsuits alleging misrepresentations in the purchase and sale agreement.
- Earn-out agreements in acquisitions can lead to legal disputes over the calculations, or performance metrics.
- Difficulties in valuing a company can raise the risk of legal disputes over valuation of liquidity of stock, particularly with employees for whom the company stock represents a significant portion of their compensation.
Employment Practices (EPL)
Helps protect companies from employment related risks.
- There is a growing awareness of sexual harassment issues in many industries.
- Growing companies may have limited human resources infrastructure, which may make it more vulnerable to employment practices lawsuits.
- Gender and age discrimination are noted challenges for some industries.
Errors & Omissions (E&O)
Provides coverage for allegations of errors, omissions or negligence in providing services to others.
Customers may allege a defect exists in your product or service, or the product or service fails to perform in accordance with the terms of an agreement.
Failures in products and apportioning liability may require costly expert analysis.
Defense expenses may compromise a large portion of E&O lawsuits.
Provides coverage against lawsuits for copyright infringement and other media related claims for companies that produce, promote or publish content.
- Producing, promoting or publishing media, advertising or other content exposes the company to liability risks.
- Suits arising from mistakes such as misstating fact, exceeding the scope of a licensing agreement, or disparaging a competitor.
- Even meritless lawsuits must be defended and defense expenses may compromise a significant portion of the costs.
Provides liability (third party) and expense (first party) coverage for companies that collect, store or transmit private or proprietary information.
- Many companies are prime targets for cyber-crimes, hackers, and former employees.
- State agencies and the Federal Trade Commission have enforced laws and regulations requiring companies to protect consumer information, increasing risks for businesses.
- More than half of all cyber breaches result from human error or system problems.