Risk Managers Advised To Prepare For Coronavirus D&O Claims

Businesses should brace themselves for a likely flood of shareholder suits related to the new coronavirus outbreak, but the success of any litigation may depend on companies’ willingness to fully disclose directors and officers liability-related risks now, say many experts.

In addition to D&O suits, commercial policyholders may face lawsuits and claims related to employment practices liability, cyber liability and workers compensation exposures stemming from COVID-19, the disease caused by the virus, which as of Monday had killed about 3,800 people globally.

Last week, the U.S. Securities and Exchange Commission directed companies to disclose information related to the coronavirus, which could have implications for D&O claims.

SEC Chairman Jay Clayton issued a statement saying companies must provide investors with assessments and plans for addressing material risks to their businesses and operations resulting from the coronavirus “to the fullest extent possible.”