Far too many business owners seem to think the need for directors and officers (D&O) liability and similar management liability insurance (MLI) is only for public companies. If you number yourself among them, a major recent survey of nearly 500 decision-makers in private companies by a leading public opinion and research firm may surprise you. A few of the findings:
- In the past three years:
- 44% of private companies have had at least one loss event related to D&O, errors and omissions liability, fiduciary liability, or similar liability coverages.
- 27% of private companies have experienced a D&O claim.
- 20% have experienced employee fraud.
- 25% have experienced an employment practices liability (EPL) incident.
- The majority of survey respondents believed such coverages were already included in the general liability policy, when in fact they were not.
- A significant percentage of respondents indicated their companies are contemplating taking actions in the next year that will directly impact the need for MLI protection: increasing or decreasing their workforce; reducing or eliminating employee benefits; and mergers or acquisitions.
- While the median employee fraud loss suffered was $140,000, respondents reported losses as high as $3 million.
- The average cost, including legal fees and fines, of a D&O loss was almost $700,000, but individual losses were reported up to $10 million.
If you have not already discussed our MLI program with your agent, now is the time to schedule a convenient appointment. Be certain your current liability insurance offers the protection you need from these types of potential losses.
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