The Top 5 Directors & Officers Risks
Directors and Officers continue to play an integral role in the development of an organization. As these professionals are crucial parts of corporate governance and decision-making, it is imperative to make sure there is a safety-net in case mistakes are made – something we have discussed previously.
The risk, though, is only rising. A global survey conducted by Willis Towers Watson and Clyde & Co found that cyber attacks and data loss continue to pose the biggest threat to directors and officers – and that pandemic working practices have only deepened concerns.
Though cyber attacks and data loss have been worries for the past few years, experts now agree that they are the top risks facing directors and officers – with regulatory risk, health & safety, and risk of employment claims rounding out the top 5.
To anyone who has been following business trends over the past 12 to 24 months, the rise of cyber attacks is unsurprising. As the world becomes ever more reliant on technology and online connection, the pool of victims grows – with cybercriminals now showing a tendency to go after small-to-medium sized businesses rather than large corporations.
According to the report, “The COVID-19 pandemic has proved to be a fertile ground for cyber criminals seeking to exploit the weaknesses presented by businesses having to move to new procedures and systems overnight, often with a remote workforce.” It continued, “The trend is towards bigger targets and bigger incidences and ransomware attacks are also on the increase, which could expose D&Os to criminal sanctions for breaches of terrorism and proceeds of crime laws.”
Since cybercriminals are not going away any time soon, the only option that remains is to be well-equipped and protected against a potential cyber attack – which is why cyber liability insurance is quickly becoming an essential coverage.
The survey also found that, though data loss and cyber attacks lead the way, regulatory risk and employment claims are not far behind.
According to Claims Journal, “Employment claims have long been a substantial business risk, with high frequency claims, and, in some cases, very high severity claims affecting operations.”
Though U.S. based offices ranked employment claims higher as a risk than the rest of the world, the data shows that organizations around the world consider it a sizeable risk.
The report explained, “It is perhaps not surprising that exposures relating to pandemic-triggered furloughs and layoffs, as well as return to work and vaccination policies, may exacerbate those concerns, bringing these issues higher into the top five in the minds of our U.S. respondents.”
As the uncertain nature of the future evolves, it is imperative to be protected against any and all potential risks – after all, a stitch in time saves nine.
To better understand how you and your organization can be safeguarded against the aforementioned risks, contact one of our licensed experts at 905-696-9090 or