Leading a business has its challenges. Directors & Officers take huge responsibilities in the day-to-day management of companies. Their decisions and management direction are often put “under the microscope.” Here are a few trending professional liability risks to consider.
Ongoing M&A and Corporate Restructuring
Special purpose acquisition companies (SPACs) have risen to prominence in recent years. 2021 has already seen a significant increase in SPAC creation seeking private company targets for acquisition/de-SPAC. The increase in the number of transactions along with increased litigation activity could impact available limits and capacity.
Focus on Diversity & Inclusion
Increased focus on diversity in board composition. Having a diverse board can help to anticipate concerns and perspectives of all key parties.
Increase in Derivative Lawsuits
Derivative lawsuits are not only growing in frequency — they also seem to be getting more expensive to settle. Plaintiffs are now looking for compensatory damages in addition to attorney fees and changes to corporate governance.
Continuing ESG Activism
Public companies are facing pressure from shareholders to better manage exposures to environmental, social, and governance (ESG) risk factors.
Importance of Side-A Coverage
Companies should consider buying Side-A coverage that sits on top of the traditional ABC coverage tower with personal risks for directors and officers becoming greater.
Looking for a more client-focused approach to professional risks? Talk to us: axaxl.com/executive-liability.
AXA XL is a division of AXA Group providing products and services through three business groups: AXA XL Insurance, AXA XL Reinsurance and AXA XL Risk Consulting. In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, insurance coverages are underwritten by XL Specialty Insurance Company – Canadian Branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA Group. Not all of the insurers do business in all jurisdictions nor is coverage available in all jurisdictions. Information accurate as of May 2021.