Special purpose acquisition companies (SPACs) are created by sponsors who raise capital in an initial public offering (IPO) and use those proceeds to acquire a private company and take it public. And while SPACs have grown in popularity over the past year, they are not without certain legal risks. There is a potential for lawsuits […]
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The directors and officers (D&O) liability insurance market has experienced a challenging year. Moving into 2023, we’ll see some of these issues resolved, and we’ll also experience new changes in the market. For an existing policyholder or a business considering D&O liability insurance, the following are general D&O trends that we expect to see in […]
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A professional lines liability policy provides financial protection for claims of negligence that are brought against a business by a third party, due to a product or service the business provides. Today, nearly every cannabis business has some type of professional liability exposure. Triggers for these types of claims include: An act, error or omission […]
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Cryptocurrencies such as Bitcoin and Ethereum are vulnerable to hackers who are looking to steal private keys (security passwords that allow investors to access their funds), which would allow them to access an account and make unauthorized withdrawals. Unfortunately, despite robust security efforts, the cryptocurrency sector continues to face risks associated with hacking and fraud. […]
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Most directors and officers (D&O) policies provide three types of coverage. Side A of a D&O liability policy responds to claims brought against directors and officers when a company cannot or will not indemnify them. Side B provides claim reimbursement to the company for money it pays directors and officers as indemnification. And while side C […]
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Coming down from the peak of a hard market for most of the year, we are now seeing a significant shift in directors and officers (D&O) insurance market conditions with broader terms, better pricing and greater capacity. According to the latest Willis Towers Watson (WTW) D&O insurance market survey report, we can expect these favorable […]
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In a previous blog, I addressed the growing issue of employee retaliation claims and the financial impact they can have on a business. Here, we’ll look at five ways you can better safeguard your company against these types of claims. 1. Document, document, document When facing a legal claim, you’ll need to have evidence to […]
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Making their way through Congress are three bills focused on the decriminalization or legalization of cannabis. If passed, these bills will have a significant impact on the cannabis industry, businesses and consumers. 1. The Cannabis Administration and Opportunity Act (CAOA) This is the latest iteration of legislation that proposes ending the federal prohibition of cannabis. […]
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As a businessowner, it’s important to know the different roles that board members hold and to understand the duties that come with each position. While roles and responsibilities will vary from business to business, there are commonalities that apply to most all boards. Here are the basics. Board President Also known as the board chair, […]
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Did you know that small businesses are three times more likely to be targeted by cybercriminals than larger companies? Today, as more small businesses become prime targets of a cyberattack, business owners are looking to their cyber liability insurance policy to help them mitigate risks. However, not every cyber policy is created equal. Here are five coverage […]
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From making key business decisions to safeguarding shareholders’ interests, the fiduciary duty of a board of directors is to act in the best interests of others. For a fiduciary duty to exist, there must be a significant relationship of trust between a board member and the business. When that established trust is broken, a breach […]
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Have you heard of retaliation claims? This situation can arise when a worker alleges that their employer has taken improper employment action against them as a form of retaliation – in particular, when the employee was exercising their rights under the law. For example, a worker is denied a promotion after filing a complaint about […]
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Those who are willing to invest their time and energy to serve on a board of directors (BOD) will find themselves rewarded for their commitment. However, in addition to the many benefits of serving, there are potential risks that can lead to costly claims for board members and the business. “Directors who sit on a […]
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Earlier this month, I talked about the importance of a cyber incident response plan (CIRP) in helping your business better contain and reduce the impact of a cyberattack. Here, we’ll look at four initial steps for getting started with your own CIRP. According to Cybersecurity Automation, an online news source for trends in cybersecurity, a […]
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Did you know that 43% of all cyberattacks in the U.S. happen to small and medium-sized businesses? Unfortunately, despite the increase in frequency, only 14% of business owners surveyed feel prepared to defend against an incident, according to Accenture’s Cost of Cybercrime Study. In fact, 45% of businesses admitted that their current cyber protection processes are […]
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For the longest time, initial public offerings were the “go-to” choice in public offerings. Recently, however, startups have discovered a more manageable alternative to traditional IPOs by way of special purpose acquisition companies, or SPACs. Here are four reasons why more private companies are electing to go with SPACs versus the IPO route. 1. A […]
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Recent social and political changes have made diversity, equity and inclusion (DEI) part of a bigger conversation for businesses of all sizes and in nearly every industry. Today, DEI is more than just doing the right thing. According to the U.S. Chamber of Commerce, in addition to respecting human rights and dignity in the workplace, diverse […]
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Directors and officers (D&O) liability insurance policies can vary greatly from insurer to insurer. For this reason, it is important to understand the basic components of a policy so you can select the coverage that is right for your business. A typical D&O policy has three parts: A, B and C. This option can provide […]
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When added to an insurance policy by way of endorsement, tail coverage allows the insured to file a claim after a policy has expired or been canceled – essentially extending coverage for a stated period. Let’s look at three things business owners need to know when considering tail coverage in a D&O liability policy. #1: The Prior […]
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According to Bloomberg research data, the recent flood of special purpose acquisition companies (SPACs) has propelled private businesses onto U.S. stock markets, allowing them to avoid the complexities of traditional initial public offerings (IPOs). However, as with any type of merger, it is important to consider all the potential risks and outcomes, and to plan […]
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Self-insured retention (SIR) is a provision in a liability policy that states a specific dollar amount in the insurance contract. In the event of a covered claim, this amount must be paid first by the insured, prior to the insurance company payout. Once a policy’s SIR limit has been met, the insurance company will respond […]
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In November 2021, a $237.5 million claim settlement was paid out by current and former Boeing Company directors to resolve claims that these individuals of the company ignored safety issues concerning Boeing’s 737 MAX aircraft. According to The National Law Review, the Boeing settlement ranks as one of the largest derivative settlements to date. However, […]
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A recent Willis Towers Watson (WTW) D&O Marketplace Survey highlights how our current economic environment (due in part to COVID-19) continues to impact an already-challenged directors and officers (D&O) liability insurance market. Here, we’ll look at key takeaways from the survey as they relate to D&O trends, and how this environment is fueling underwriter concerns […]
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In part one of this article, we reviewed common issues associated with special purpose acquisition company (SPAC) litigation risks. Here, in part two, we’ll look at the three main types of directors and officers (D&O) liability insurance programs that typically respond to SPAC-related litigation claims, as well as information regarding policy coverages and limits. Types […]
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The special purpose acquisition company (SPAC) market has exploded. According to CNBC, funds raised via U.S. SPACs totaled $87.9 billion at the end of the first quarter of 2021, exceeding the $83.4 billion issuance in 2020. However, despite their popularity, SPACs come with certain risk factors, including risks that can impact a company’s executives and […]
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Bitcoin. Ethereum. Binance Coin. When it comes to digital assets, investors have a growing number of choices. In fact, at the end of May, there were 10,115 different types of cryptocurrencies available — a number that continues to increase daily. However, when it comes to volume, Bitcoin and Ethereum currently hold better than 60% of […]
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The insurance industry is continuing to experience an increase in D&O-related claims and lawsuits due to the pandemic. A more prevalent issue involves accusations that a company’s executive management or directors and officers allegedly contributed to the drop in stock price or other negative financial consequences triggered by COVID-19-related issues. As these lawsuits become more […]
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To date, the record number of initial public offerings (IPOs) this year has eclipsed that of 2020 — and the year isn’t over yet. While an IPO offers several financial benefits to a company, the change in structure also creates new risk exposures, including liabilities that can impact a company’s executives, directors and officers.
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A review of federal securities class actions revealed that there were 97 new D&O class action securities cases filed against life science companies in 2019, accounting for nearly 24% of all new filings that year — a 13% increase from 2018. In fact, 2019 saw the fifth-highest number of D&O filings since 1996.
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Not every business has the financial resources to defend their directors and officers over management decisions that lead to a costly lawsuit. Having a D&O insurance policy can help mitigate this risk. D&O insurance is also helpful for startups that are trying to secure funding from investors, as well as companies looking to attract qualified directors and executives.
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Adding tail insurance to a D&O policy is an often-overlooked coverage for businesses. When it comes to mergers and acquisitions, tail coverage becomes especially critical in extending protection for claims that are reported after the current D&O insurance policy ends and during the extended reporting period.
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The need for cannabis companies to secure Directors & Officers insurance is no different than the need of any other business. Like most companies, cannabis operations are at risk of potential litigation brought against their executive teams for alleged wrongful acts.
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The second half of this year is seeing more companies exploring acquisitions, divestitures, and other deal-type transactions — a surge that isn’t expected to slow down anytime soon.
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Tremendous growth in the number of Special Purpose Acquisition Companies (SPACs) has increased demand for Directors & Officers (D&O) insurance.
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