The risks faced by directors and officers (D&O's) have expanded simultaneously. D&O's should become more aware of their personal liability as event driven lawsuits have shifted securities class action litigation.
When asked to outline some of the key factors currently driving the personal risks facing directors and officers, D&O Insurance Partner Thomas Bentz said, "the types of cases directors & officers face have changed. Until recently, most securities claims against D&Os involved allegations of accounting or financial misrepresentations."
"Now, we see a lot of event driven litigation. For example, in recent years, we have seen securities class actions filed against D&Os related to the #MeToo movement, the wildfires in California, data breaches, airline crashes, and so on. None of these claims involved allegations of accounting fraud. Instead, they allege that the D&Os were liable to shareholders because of negative events that impacted the company’s stock price. These event driven lawsuits are expensive to defend and hard to predict," Mr. Bentz added.
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