Directors & Officers

A Closer Look at Directors & Officers Insurance

In any corporation, the company’s leadership team is comprised of a group of executives entrusted with managing the business. These leaders must often make difficult decisions that influence the financial stability and growth of a given company. The duty to manage the company comes with significant risk exposures, necessitating specialized liability insurance protection. That is where Directors & Officers (D&O) liability insurance plays a vital role, protecting the personal assets of corporate executives and their families. Here is a closer look at D&O insurance, how it works, and how it can give peace of mind to corporations across industries.

What is Directors & Officers Liability Insurance?

Known in the insurance world as “D&O” insurance, Directors & Officers Liability Insurance is one part of a comprehensive risk management strategy for corporations. In simple terms, this insurance is designed to protect the personal assets of corporate leaders and their spouses in the event they are sued by other parties for any alleged or actual wrongful acts committed while managing the company. Personal suits for alleged or actual mismanagement can come from employees, customers, vendors, and investors in the company as well as many other third-party sources.

In addition to protecting the personal assets of corporate leaders, D&O insurance typically provides coverage for the legal expenses, judgements or settlements, and other costs associated with legal claims.

What are the Risks Directors and Officers Face?

The executive leaders of a company have an obligation of corporate governance, or the actions needed to keep the company healthy and secure. Unfortunately, this obligation comes with substantial risks. Anyone who believes that the directors and officers of a company are failing in their roles in corporate governance or financial duties may wish to file a legal claim against them. Common legal claims include:

  • Lack of or negligence in corporate governance
  • Failure to comply with workplace and employment laws
  • Misuse of corporate funding
  • Misrepresentation of the company’s financial assets
  • Breaches in fiduciary duty, including financial losses or bankruptcies
  • Claims from competitors, including theft of intellectual property or patents as well as poaching competitors’ customers

Under most D&O policies, criminal acts or illegality are not covered. While allegations of fraud are a common type of legal claim filed against corporate leaders, legitimately fraudulent behavior on the part of these leaders is generally not covered under D&O insurance.

Who Needs D&O Insurance Coverage?

For many years, D&O insurance has been associated with the largest corporations, such as prominent Fortune 500 firms. In reality, nearly every business that has a corporate board of directors or a management advisory committee can benefit from the protections afforded by D&O liability insurance. This can include both profit and non-profit companies as well as public agencies or organizations. If an organization has a directors group, any of those leaders can be personally sued for the myriad of reasons illustrated above. Investing in D&O insurance makes sound financial sense, protecting the assets of leaders and their families.

About U.S. Risk

U.S. Risk, LLC. is a wholesale broker and specialty lines underwriting manager providing a wide range of specialty insurance products and services. Headquartered in Dallas, Texas and operating 16 domestic and international branches, U.S. Risk and its affiliates would like to help you access a world of new markets and products. For more information, contact us today at (800) 232-5830.


5 Measures for Effective Cybersecurity After COVID-19

Around the world, the coronavirus pandemic has had powerful effects on industries of all types. Businesses were forced to adapt quickly to protect their customers and their employees. Because COVID-19 required stringent social distancing and self-quarantine restrictions, many businesses shifted to online work environments to remain in operation. Other companies focused on e-commerce, allowing them to continue delivering the goods and services consumers needed. Cybersecurity, then, became ever more important, as remote employee access and online shopping took center stage in many business operations. As an effective risk-management strategy, business owners must leverage the protection of cyber liability insurance plans and industry best practices to keep their networks and their sensitive data safe. 

Challenges and Risks During the COVID-19 Pandemic

As businesses revamped their operations, moving to remote work environments for their employees, challenges and risks for cybersecurity professionals and business leaders grew rapidly. Some of the challenges include:

  • Access to critical business networks via personal computing devices and on less-secure home networks.
  • Employees unfamiliar with cybersecurity practices, making them vulnerable to social engineering hacks and similar cyber criminality.
  • Targeted attacks by criminals on already-strained networks, particularly critical services such as healthcare and banking operations.
  • A change in perceptions about anomalous network behaviors. Prior to the pandemic, these behaviors were seen as evidence of criminals attempting to breach computer security. Now, with so many people working from home, anomalous behaviors are the norm rather than the exception, making actual criminal activity harder to spot. 
  • Flaws in security on popular productivity software products, including video conferencing platforms like Zoom. 

Most importantly, business leaders may not be fully aware of the cyber risks their companies face in the dramatic upheaval of the pandemic and its aftermath. While cyber liability insurance is designed to protect against many risks associated with network breaches and data loss, it is critical that leadership understands these risks and makes efforts to manage them effectively.

The 5 Measures: Cybersecurity Now and Post-Pandemic

In response to the unprecedented cyber risks exacerbated by the pandemic, the World Economic Forum (WEF) published a report entitled “Cybersecurity Leadership Principles: Lessons Learnt During the COVID-19 Pandemic to Prepare for the New Normal”. The report’s aim is to shape adequate responses to growing cyber threats, and contains five measures that will shape the future of cybersecurity. The five measures are:

  1. Fostering a culture of cyber resilience: As risks grow and wane, resilience is the key to continued data safety. Implementing proactive risk management practices and developing strategies to recover from cyber attacks are among the recommendations of the WEF.
  2. Focusing on protection of critical assets and services: It is impossible for businesses to protect every aspect of an operation. Instead, identifying and prioritizing those assets and services that are critical for business continuity while maintaining compliance with privacy and data security regulations is the better course of action.
  3. Balancing risk-informed decisions within the pandemic and in the future: Implementation of new systems and practices always come with new risks. Leaders must balance those risks and may have to make difficult decisions as they adapt to the “new normal”. Maintaining flexibility by continual reassessment of existing and emerging risks will help balance risk exposures.
  4. Updating and practicing response plans, including those designed for business continuity: While many companies have created business continuity and data breach response plans, these are not static documents. Risks evolve, and even the best plan is useless without testing its capabilities. By updating and practicing the plans, deficiencies can be uncovered and remedied before an actual response is needed.
  5. Strengthening collaboration throughout the business ecosystem: Establishing and building partnerships between public and private entities regarding cybersecurity is the key to continued success. Sharing information between partners in a transparent manner is the goal of this collaborative effort. By leveraging the power of collaboration, business leaders can more quickly identify emerging threats and take the steps needed to manage or eliminate those threats before they can cause an embarrassing and expensive data breach. 

The future is uncertain, but what is certain is that cyber criminality will continue to threaten the business world. In addition to protecting assets and systems with robust cyber liability insurance plans, insurance agents must provide their clients with the information and practices designed to manage risks going forward. The COVID-10 pandemic has been a challenging time, but it has also provided an important learning experience for industries around the world. These lessons will shape the direction of  cybersecurity response for years to come. 

About U.S. Risk

U.S. Risk, LLC. is a wholesale broker and specialty lines underwriting manager providing a wide range of specialty insurance products and services. Headquartered in Dallas, Texas and operating 16 domestic and international branches, U.S. Risk and its affiliates would like to help you access a world of new markets and products. For more information, contact us today at (800) 232-5830.

American Offices

The Future of American Offices After COVID-19

The coronavirus pandemic of 2020 has dramatically altered our perceptions of the world around us. Self-quarantine and stay-at-home orders impacted business environments, forcing many to adapt rapidly to meet public health guidelines. The economic hardships brought on by COVID-19, and the fundamental changes in the way companies do business, will resonate for years to come. Rather than a “return to normal”, many companies are rethinking office spaces in an effort to protect employees and to ensure smooth operations. American offices are sure to be transformed in both novel and familiar ways in the coming years, with the modern workplace offering a bit of new and old.

Before the Pandemic: Office Work Environments

Beginning around the time of the “dot com” era, or around the mid-1990s, office-oriented businesses began to explore new ways of arranging office work spaces. The goal was to get more employees into smaller spaces while fostering a collaborative environment. The cubicles so ubiquitous of offices around the country were discarded in favor of open-concept work areas. Modern workplaces were open and inviting, with few physical barriers between workstations. This open atmosphere allowed easy collaboration between office workers and subconsciously reinforced team-building efforts on the part of office managers and staff.

Frequent in-person meetings were another hallmark of the “new” office environment. Most offices had dedicated conference rooms for small gatherings and for full team collaborations. In the wake of COVID-19’s effects on offices, open plans and in-person conferences have come under scrutiny for their potential in increasing infection risks among office workers.

A Path Forward: Adopting New and Time-Honored Solutions in the Office Environment

Cubicles, or workstation systems that function like them, may be making a comeback in American offices. Post-pandemic, modern workplaces may feature transparent dividers, helping to reinforce the social distancing guidelines published by public health agencies. Although the dividers will keep office workers separate from each other, the overall look and office atmosphere will remain open, unlike the cubicles of old. Dividers may appear in common areas as well, including bench workstations, restroom sink counters, and eating areas in break rooms.

New – or reimagined – office tech is transforming the modern workplace as well. Companies are leveraging remote access technologies to reduce the number of workers in an office at any one time. By splitting offices into shifts, some workers can telecommute while others report to the office. The shift teams then switch work locations according to a rotating schedule. Video conferencing platforms are also taking the place of in-person conferences, even within the office itself. Participants can remain at their own socially-distanced workstations instead of reporting to a closed-off conference room, reducing direct contact between groups of people.

Finally, many companies are taking steps to enhance office cleaning, with advanced disinfectants to wipe down common areas, high-touch equipment, and fixtures, UV light systems, and antibacterial coatings on equipment items that are handled frequently. HEPA air filtrations systems, already popular in many office environments, will see further adoption. Surfaces that are difficult to keep clean or to sanitize, such as carpeting and fabric upholstery, will be discarded in favor of solid surfaces, including tile, woods, and plastics. These surfaces are more easily wiped down with disinfectant products as needed.

By blending traditional office layouts with new technologies and strategies for improving office safety, American offices are witnessing a transformation. The post-pandemic office will be designed and maintained to help workers avoid the spread of infection, allowing them to keep operations running with a minimum of workplace-related illness claims. Ultimately, these new office environments will promote productivity while managing insurance costs – and workers benefit from improved safety in their modern workplaces.

About U.S. Risk

U.S. Risk, LLC. is a wholesale broker and specialty lines underwriting manager providing a wide range of specialty insurance products and services. Headquartered in Dallas, Texas and operating 16 domestic and international branches, U.S. Risk and its affiliates would like to help you access a world of new markets and products. For more information, contact us today at (800) 232-5830.

COVID-19 Workers Comp Considerations

What Employers Should Consider Regarding COVID-19 and Workers Comp

The coronavirus pandemic gripping the globe has had profound effects on businesses of every size and type. Millions of people have been laid off in the wake of economic turmoil. Still, many employees of companies have been forced to balance work with safety considerations, potentially leading to serious risks regarding their personal health. Workers in establishments deemed “essential,” including retail, healthcare, and foodservice operations, are at higher risk of contracting COVID-19 in the workplace; in these cases, workers’ compensation insurance may be called upon to provide financial relief for affected workers. In this guide, insurance agents can learn what their clients should consider following the economic devastation of COVID-19 and the effects it has had on workers’ comp claims.

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Financial Institutions

Considerations for Banks and Financial Institutions in a Time of Pandemic

Banking and financial institutions have faced unique risks since their very beginnings. Those risks are compounded by the effects of the global coronavirus pandemic. As economies the world over have ground to a halt, individuals, companies, and communities face significant financial hardships. These hardships have an outsized impact on banking, capital markets, and financial services firms. Although financial institution insurance is designed to protect against many risks, financial managers can help manage risk exposures better by gaining an understanding of the unique challenges uncovered by the COVID-19 crisis.

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COVID-19 and the Long-Term Impacts on Cybersecurity

The novel coronavirus pandemic has created powerful effects across all areas of our lives, including how we interact with others and how business is conducted. COVID-19’s negative health effects are only one part of how this pandemic is influencing business operations. As more companies move to virtual at-home work environments, the need for robust cybersecurity has grown in importance. There are short-term effects associated with changing cybersecurity needs, but insurance agents need to be aware of potential long-term ramifications for their business clients, including comprehensive cyber liability insurance solutions.

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Labor Challenges

Temporary Labor & Legal Challenges for Staffing Resulting from COVID-19

As the coronavirus pandemic continues to negatively affect businesses across the United States, many companies are facing staffing shortages. In order to fill staffing gaps, an increasing number of companies are utilizing the services of staffing agencies. For temporary laborers and the staffing agencies that place them, there are significant challenges looming on the horizon. For staffing agencies, one of these challenges is centered on general and professional employment liability. Agencies have a basic duty to verify that reasonably safe work accommodations are available for their temporary employees; in the wake of the highly-contagious coronavirus, protecting temporary employees from illness becomes a greater concern.

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How Will Coronavirus Impact Cybersecurity and Why Does it Matter?

As the coronavirus pandemic has descended on the world, it has affected people’s lives in many unexpected ways. Stay-at-home orders and social distancing guidelines have led to fundamental changes in the way business is being conducted, with many individuals forced to telecommute for the first time in their careers. Throughout personal and professional lives, more interaction has moved to web-based services, including e-commerce, communication, and information resources. Unfortunately, many companies are underprepared for the sudden reliance on remote access technologies, potentially opening the door to cyber criminals. While cyber liability insurance is one part of a more comprehensive risk management program for business interests, it is critical that insurance agents help their clients understand emerging cyber risk exposures created in the wake of the coronavirus.

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Caregiver Risk Management in Assisted Living Facilities in the Wake of COVID-19

Senior citizens are considered a high-risk population whenever infectious diseases are an issue. Seniors, especially those living in long-term care centers like assisted living facilities and nursing homes, may be at even higher risk of serious or even fatal complications from infectious disease pathogens. As the global pandemic of COVID-19 continues to wreak havoc, caregivers and managers in care facilities need to understand the risk management practices that can protect their residents. While assisted living facility insurance is an integral part of a more comprehensive risk management plan, careful planning and the implementation of regulatory guidelines can reduce the impact coronavirus is taking on America’s at-risk senior population.

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COVID-19 Commercial Transportation Impact

How is COVID-19 Affecting the Commercial Transportation Industry?

The commercial transportation industry is a vital component of American commerce. 24 hours a day, vehicles and their drivers’ transport goods to all corners of the country. Even in the wake of the coronavirus pandemic, commerce depends on the smooth and efficient transportation of goods, placing commercial drivers into the category of essential personnel. COVID-19, the disease caused by the novel coronavirus SARS-CoV-2, has created significant challenges for the commercial transportation industry. In any risk management strategy for trucking operations, commercial transportation insurance is a vital component. Understanding the evolving challenges as the COVID-19 pandemic continues in the U.S. is another means of managing risk exposures.

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