Executive protection is a necessary investment for companies to survive. This important balance sheet protection tool can be the difference between survival or peril in today’s litigious environment.
As you look to protect your business from executive risk, it’s important to understand the different types of risk associated with it. Executive protection is broken down into different categories.
Here’s a breakdown of what Executive Protection covers.
Employment practices can mean numerous things: wrongful termination, sexual harassment, discrimination, and hostile work environments.
Within the main categories listed above, there are many subcategories that have proven to be a risk. For example, an employee could file an EPLI for emotional negligence.
There are many factors that are increasing liability risk for 2021. With most offices returning to in-person work environments, the risk runs even greater.
COVID brings another element to potential ELPI claims. Some of the potential situations that could occur with returning to the office or adopting a hybrid model include:
- An employee feels emotional neglect for having a hard transition to in-person work after working from home for a year.
- Employees might feel that higher-ups have conducted the health and safety aspect of COVID-19 at a lower standard.
- An employee refuses to follow new guidelines and regulations stated by the Occupational Safety and Health Administration (OSHA).
- An employee returns to the office and contracts COVID-19 from a co-worker.
These examples only begin to predict what could happen in the future.
Based on the law passed in 1974, there are regulations that businesses must have as baseline coverage for all employees. If these basic guidelines are neglected, then there’s a liability risk. Some examples of failing to meet guidelines might include:
- Improper enrollment or terminations
- Resulting in lost or incorrect benefits
- Errors in counseling when administering health or welfare plans
- Resulting in lost or incorrect benefits
- Giving poor or negligent advice on investing employees’ retirement plans
- Making risky investments in a defined benefit pension plan
- Wrongful denial or improper change in benefits
- Imprudent selection of and/or monitoring or third-party service providers
There are other terminologies that are thrown around in the workplace, like Errors and Omissions (E&O) that follow similar guidelines.
Media liability coverage protects the insured against claims arising out of the gathering and communication of information and is critical to any media organization. The variety of claims being asserted against the media, and the size of jury verdicts against media organizations, are constantly on the increase.
According to data released by the Libel Defense Resource Center, the median jury award against media organizations in 1990 was $500,000; in 1997, it was $2.3 million.
Cyber and Tech
Cyberwarfare is not just for meddling in elections and extorting multinational corporations. Companies of all sizes and types can fall victim to enterprising hackers and cyber extortionists. The question all companies must ask themselves is not “what is my data worth to someone else?” but “what is my data worth to me?” Of course, well-crafted IT protections are a crucial first line of defense, but if the protections fail, could your company shoulder the cost of an uncovered claim or ransom payment?
Cyber insurance coverage is likely broader, less expensive, and more crucial to your business than you would think.
Another fancy term is trade credit. This can basically be broken down to the idea that trade credit protects manufacturers, traders, and service providers against losses from non-payment of commercial trade debt due to bankruptcy, insolvency, or very late payments.
IP insurance covers companies for the legal costs associated with pursuing infringement or theft of IP. It also covers legal defense costs for policyholders accused of IP infringement or theft. There are two basic types of IP insurance:
Infringement Defense: Covers policyholders for infringement claims brought against them.
Abatement Enforcement: Gives the insured the financial resources to enforce their IP rights and pursue infringement claims.
In today’s increasingly perilous and litigious business environment, every company faces risk. It is unfortunate that any of your company’s many constituents—including employees, investors, customers, suppliers, competitors, government agencies, and creditors—pose a financial risk to your business. Any one of them, however, could sue your company or target it for criminal activity.
As you look to protect your business from these potential threats, enlist the help of an insurance mentor. At Benchmark, we invest in our clients’ protection and we aim to ensure your business remains risk-free. Reach out to us today to start a conversation about your business’ risk!