What are the impacts of COVID-19 likely to be on D&O Insurance renewals?

2. Have directors tested the appropriateness of their business continuity plan on:
a. their employees;
b. their supply chain;
c. the financial condition of the business.

3. Have the directors continued to communicate clearly and timeously with internal and external stakeholders throughout the pandemic?

4. Is it possible for the Board to maintain standard risk / operational controls and procedures during the current pandemic? If not, how have they been operating?

5. Have any COVID-19 related circumstances (including work from home arrangements) impacted continuous disclosure controls and procedures?

7. What is the company’s current cash position like?

8. If current conditions persist or deteriorate, when will you need access to additional capital or funding support?

9. What are your current debt covenants and how is the business positioned in relation to continuing to meet them?

10. Is the current business continuity plan time limited or is the alternate operating approach one that the directors can operate under indefinitely?

Some of the key concern areas for underwriters and where we might see potential D&O claims arise include: inadequate or poor continuous disclosure, employment or occupational health & safety concerns, and cyber & privacy risks.

• Cannings Purple – COVID-19 and communication

• ASX – Listed Compliance Update (31 March 2020)

• Were the appropriate risk management tools used when setting staff up to work from home?
• Just because staff are physically distanced from the office have all company policies still been prioritized and communicated to staff?

• Have redundancies/standing downs or variations in terms of employment all been conducted with due regard to the applicable legislation modified by any Federal variations?
• What work health and safety procedures have been implemented to continue to manage COVID-19 related risks in the workplace (whether remote working or back in office)?

The Board will need to have examined any exposure which may arise due to potential differential treatment of staff during the pandemic.

• Have Boards taken the appropriate steps to ensure that staff are aware of their responsibilities online?
• Have appropriate security and privacy safeguards been installed?
• Has appropriate staff training been undertaken to make staff aware of heightened risks during the period of remote working?

Please refer to our Cyber Insurance during COVID-19 page for more details here.

Directors duties are never under more scrutiny than during a crisis and unfortunately, this is where failings in procedures can be exposed. However, where Boards have acted swiftly and demonstrated clear and effective direction to staff and stakeholders alike, they will be placed in a stronger position during their insurance renewals.