Insurers are increasingly worried about shareholders, employees or customers bringing coronavirus-related claims against company executives and are considering excluding the virus from policies which protect the bosses, industry sources say.LitigationLiabilityExcess & Surplus Lines
Two cases have been filed in the United States in recent weeks accusing companies of making misleading statements about the coronavirus or their coronavirus plans in order to sell products and boost their share price, while cruise operators, for example, are bracing for claims from passengers stuck on ships hit by the virus.
More such cases may follow in the U.S. and other parts of the world where class action suits can be filed, such as Britain, continental Europe, Australia and Canada, the sources said.
“An uptick in litigation targeting directors and officers across industry sectors is one likely, and unwelcome, consequence” of the coronavirus pandemic, said James Whitaker, partner at law firm Mayer Brown.
Companies who face legal action use directors & officers (D&O) insurance to pay their executives defence costs and any penalties awarded by the courts.