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Common Directors and Officers Exposures
Posted on: December 9, 2015 by Newmark Insurance
The Justice Department and the Securities and Exchange Commission (SEC) have recently identified the common violations that directors and officers face as corruption, fraud, cybercrime and social issues. As these concerns can lead to negative consequences for both the directors and the firm, a comprehensive Directors and Officers Liability Program can provide financial protection and mitigate loss.
Corruption- Bribery is working to be eliminated by the SEC and the DOJ via the U.S. Foreign Corruption Practices Act (FCPA). Any acts in which officials offer or accept bribes will hold the offenders in violation of this act and will suffer severe consequences.
Fraud- Inside Counsel identifies these offenses as insider trading, false representations of product performance and breaches of fiduciary duty, which can also lead to investigations. For example, this can include overt theft such as stealing money or even misrepresenting company funds and statements.
Cybercrime- Data breaches and cyber-attacks are becoming more prevalent than ever before. While this development is still relatively new, adequate security measures are being put into place to combat these hackers. In order to mitigate the issue further, companies may be required to report breaches to law officials to monitor and gauge crime.
Social Issues- While many companies outsource their labor and materials, the treatment of these foreign workers has become a recent issue among directors and officers. Certain laws, such as those related to trafficking, have been implemented within foreign transactions to reduce the liability.
At NewMark Insurance Services, we understand the importance of protecting directors and officers. Our packages strive to provide ample protection and financial assistance against potential exposures. For more information, contact us today at (855) 777-6549.