Harassment claims hit D&O liability insurance
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While employment practices liability insurance is the primary focus of claims in connection with the “#MeToo” movement against sexual harassment, directors and officers liability insurance is being affected as well.
Observers point to the $90 million settlement of shareholder claims reached in November last year by New York-based Twenty-First Century Fox Inc. arising from the sexual harassment claims at its Fox News Channel against Roger Ailes and Bill O’Reilly.
The Weinstein Co., based in New York, has been named as defendant in litigation filed against former film mogul Harvey Weinstein, while Wynn Resorts Ltd. has been sued by shareholders in connection with sexual harassment charges made against founder and former Chief Executive Steve Wynn.
In general, plaintiffs allege that company boards did nothing to remedy long-standing problems and the subsequent publicity has resulted in a diminution of shareholder value, said Kelly Thoerig, Richmond, Virginia-based U.S. employment practices liability product leader for Marsh L.L.C.
“There’s definitely a dynamic here that’s going to continue to be a part of D&O liability issues,” said Rob Yellen, New York-based executive vice president of Willis Towers Watson P.L.C.’s FINEX North America practice, although not all cases affect people at the top level or firms’ securities.
“I think there’ll be not only more high-profile revelations, but we’ll see examples of investors and other stakeholders seeking to hold the directors and officers accountable following misconduct,” said Kevin LaCroix, executive vice president of RT ProExec, a division of R-T Specialty L.L.C., in Beachwood, Ohio.
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