New report suggests mining insurance (w/ D&O coverage) isn’t a priority
The new report from Allen & Overy and Willis (April, 2013), suggests that 35% of directors were unaware of risk to their assets due to personal exposure to anti-trust enforcement. It’s not just assets either. Anti-trust action can lead to jail time as well.
Mining insurance Red Flag #1
Times have proven that Officers and Directors aren’t immune from increasing litigation in Canada. Mining insurance of the past may not have needed to care about personal exposure, but things have changed dramatically. Shareholders indeed are increasingly expecting a higher level of due diligence from their Boards and Officers. Boards can always be sued by not just shareholders but prior Boards, employees, contractors and Governments etc.
We live in a connected Global world. What happens far overseas can now have a serious impact on the way that Canadian companies can be found liable. When a company is charged with overseeing the business actions of other multinational companies, are they aware of the many activities that they are now prone to being connected to? If only 65% of D&O is aware of this (and most likely protected with specific wording to their mining insurance policies), then the general answer is no.
Report suggests overwork is a culprit
The survey also suggests that many Directors & Officers are simply stretched too thin and overloaded with demands. Their time may be divided between many boards and positions.
Mining insurance Red Flag #2
Ignorance or lack of attention shouldn’t be a factor in protecting ones assets. Despite the over-worked nature of the industry, it’s not an excuse. Again, in reference to the Overy report, “the number of antitrust cases” has increased exponentially in recent years.
Are we living in an era of greater litigation?
Yes. Due to the malfeasances of companies like Enron, shareholders are more likely to seek retribution from a company’s higher-ups. As well, lawyers sensing this shift in public confidence are mustering a great deal of creativity when it comes to finding fault.
Mining insurance Red Flag #3
Whistle blowing and reporting of wrongdoing have increased in recent years. This report suggests that this is due to the fact that there are more incentives to make reports.
If your Directors & Officers get caught in the middle of an anti-trust suit, they’re going to feel the brunt of the investigation. Mining insurance with the proper coverage can better protect your Board and Officers
