Posted on: September 18, 2014 by titan-goodrich
Litigation is becoming an increasingly common challenge for many businesses across America. From regulatory disputes with local legislators to allegations over mistreatment of employees, there is a strong likelihood that businesses large and small will face a legal battle at some point or another. Still many operations remain ill prepared, especially when protecting their owners, executives and high lever management teams. Most operations don’t realize that business executives, in addition to the business itself, can be sued and held personally liable on a number of charges. It is a commonly held belief that only large, publically traded companies need to protect their directors and officer. The truth is that all businesses need to protect their top executives from the law suits and liability exposures they face.
Now you’re probably thinking why would someone sue me as a leader of a privately held company? The reality is that executives can face legal complications for a number of reasons, from a number of different sources. Here are a few of the most common examples:
1. A disgruntled shareholder- Even as a privately held company, you are still accountable to your shareholders. Often tension can build among shareholders when they believe that the leaders of a company are mismanaging some aspect of the firm. From failing to disclose key information or making misrepresentations or false claims, to failing to reach profit and growth objectives, the directors and officers can be on the hook for their professional actions in the way they conduct their business and themselves.
2. Employee related disputes- Executives can be personally held accountable for their actions should charges be brought against them regarding employment misconduct such as discrimination, harassment or wrongful termination.
3. Upset competitors- A competitor could allege that your company violated antitrust or unfair competition laws, resulting in lost business for that competitor. As a director of the business, you could be held responsible for these practices.
4. Unhappy Clients or Customers.
5. Intellectual Property Infringement- Companies or individuals may allege that your firm infringed on patents and/or trademarks. This is increasingly common in the technological era we live in.
All it takes is one legal complication to throw off an operation’s growth trajectory and financial security. Luckily, there is a way to protect your operation and your executives from these risks. Many companies offer directors & officers insurance coverage for just this purpose. These policies are growing increasingly affordable and can truly help protect the future of any business in the private or public sectors.
At Goodrich and Watson, we specialize in providing exceptional business insurance and risk management solutions to Virginia operations large and small. Our specialists can help assess your firm’s risk exposures and secure complete litigation protection for your executives and the business as a whole. Our directors and officers insurance, professional liability coverage and general liability coverage are three of the most essential liability coverages for any business endeavor. Give our Newport News Business Insurance specialists a call today at (888) 829-5004 to learn more about all the solutions we offer.