Companies faced with a growing number of liability claims against directors and officers in the wake of the COVID-19 pandemic, and the rising costs of D&O insurance coverage, may be considering creative ways to address the trend. But in a recent Bloomberg News article, the Lanier Law Firm’s Skip McBride cautioned against such tactics as Elon Musk’s decision to insure Tesla’s directors out of his own pocket.
“I’m not about to serve on a board where I have to rely on a single individual’s wealth to guarantee I have directors-and-officers coverage,” said Mr. McBride, who serves on five organizational boards. “There’s just too many unexpected things that can happen.” Mr. McBride noted that the mounting rate increases for D&O policies are “clearly related to litigation over the Covid-19 outbreak and a several-year increase in the number of securities cases against directors and boards.”
Mr. McBride is a member of a Lanier Law Firm initiative to support businesses being denied insurance claims due to COVID-19 shutdowns. The firm’s nationally recognized work in personal injury and product liability litigation provides deep knowledge of the strategies employed by insurers and how to successfully enforce policies and negotiate coverage claims. In addition, several of the firm’s attorneys serve or have served as counsel to large national insurance companies, better enabling them to counter the developing strategies by insurers to deny claims.