Having directors and officers insurance, or D&O insurance, in place helps many companies prevent damage to the assets of corporate executives in the event o personal lawsuits or alleged wrongdoing. In the era of COVID-19, however, you might be wondering whether these insurance policies have had to change in any way. Here’s what you need to know about the impact of COVID-19 and D&O insurance.
The COVID-19 Pandemic Has Forced Certain Corporate Disclosures
Perhaps one of the most noticeable impacts of the COVID-19 pandemic in this space is that corporations have had to disclose certain facts due to economic and public pressure. In turn, this has caused some degree of disruption to insurance policies, since certain claims have had to be paid out. In the long run, this could be a sign of:
- Changing market expectations
- Potentially altered time periods between when a policy ends and when claims are paid out
With Litigation on the Horizon, D&O May Be More Necessary Than Ever
Because of the increased volume of COVID-related disclosures, many companies may be facing upcoming litigation. In these instances, it’s important to hold on to your D&O policy and possibly even consider an expansion of coverage.
The effects of COVID-19 and D&O insurance are undeniable, but might not be as damaging to your company as you might think. Be sure to contact your insurance agent for guidance to help guarantee that your corporate executives are protected from lawsuits.