It cannot be denied that insurance for directors and officers is skyrocketing, whether it’s for private or public companies or even non-profits. The market is expected to remain hardened, as pressure to raise rates grows exponentially. COVID and its impact are only adding to the problem. What can be done?
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
It cannot be denied that insurance for directors and officers is skyrocketing, whether it’s for private or public companies or even non-profits. The market is expected to remain hardened, as pressure to raise rates grows exponentially. COVID and its impact are only adding to the problem. What can be done?
Insurance Business Mag suggests that a rise in securities class actions as well as reliance on litigation funding has led to insurers offering less coverage, while making underwriting guidelines more stringent. The effects of COVID reach around the globe, necessitating greater disclosures from companies who now may need to detail how their business will deal effectively with the pandemic.
Prolonged work stoppages and shutdowns have created widespread financial stress. As expected, service-based and entertainment-related businesses have been hit hardest. Even following CDC best practices guidelines may not be enough to reopen safely.
Adding lines of credit or utilizing legal funding has worked for many companies, while others continue to struggle. Ultimately, communication is a key aspect of survival in a COVID landscape. Frank and open discussions with employees, shareholders, suppliers, and customers can go a long way toward putting people at ease and finding solutions before financial woes become insurmountable.
