To help businesses better understand the level of risk their directors and officers face, BHS has developed this Directors and Officers Liability Scorecard.Instructions: Please note that each section will have its own instructions related to scoring. After you have completed all of the sections to the best of your ability, add up your score and determine your level of risk by utilizing the chart at the end of this document.
This has prompted governing bodies such as the SEC to regulate such activity through the adoption of crowdfunding rules via provisions to the JOBS Act, which came into effect in 2016.
Although beyond the scope of this article, crowdfunding practices can lead to concerns of exposing directors and officers to numerous liabilities, such as an exposure to material misrepresentations or omissions contained in such offerings.
What’s more, this can happen even if your company is not a large, publicly traded organization.
The cost of defending directors and officers (D&O) claims can run well into the six figures, leaving a business financially crippled.
Given the complexity at hand, effective coverage can only be afforded through comprehensive business acumen on the part of policy point of sale administrators.
With merger and acquisition activity rising in various sectors, combined with the expectation of a long overdue rebound in the U. IPO market, an increasing number of directors and officers will face challenges navigating unfamiliar governance requirements and exposures.
In general, and at least in the United States, executives at public companies don’t need to be convinced that their companies need to have D&O insurance.
That is not always true with officials at private companies.
Some officials at some private companies – particularly very closely held private companies – are skeptical that they need the insurance.