From AI to ESG, new regulations and their permutations, and political elections which may will lead in very different directions, mean that one wrong step could place C-suite leaders at the centre of a media storm, affecting their reputation and share price. Today, boardrooms need to recognise that with so many conflicting views and issues, every move they make could risk alienating a section of their stakeholder base.

To compound the picture, the standard directors’ & officers’ liability (D&O) risks are still very much in play.  Threats to executives posed by possible recession, bankruptcy and looming inflation are all present and, arguably heightened.

Traditionally, D&O litigation focused on businesses overestimating or mismanaging financial performance. Today, we see lawsuits being brought for a much broader range of reasons, from how businesses respond to cyberattacks to their efforts to reduce their carbon footprint by changing their supply chains and the cost this has on operations. It is also no longer just financial performance, but rather anything which can be said to be reducing the value of a brand.

The role of insurance is also changing. Passive risk transfer is out of date. Insurance is now a 24/7, 360-degree partnership. Businesses operating in multiple jurisdictions need comprehensive insurance solutions to support their specific risks in each market. As key threats become increasingly global by nature, businesses need tailored global programmes that provide coverage across their global footprint and align to the threats they face in each region.

Preparedness is key

At a time when businesses are facing global threats, from cyber risk to natural catastrophes and reputational challenges to interconnected supply chains, the need for businesses to invest in robust measures to mitigate these challenges has never been greater.

The most resilient businesses and boards are those which have done the groundwork, undertaken the necessary training across their organisation, and have everything prepared in advance of a risk arising. These organisations continuously consider their risks and have a clear approach to tackling threats, ultimately giving them competitive advantage.

As insurers, we can help businesses build resilience against the risks they face by underpinning their resilience to financial shocks and providing insight and reassurance in today’s challenging operating environment.

“Businesses face a growing regulatory burden combined with intensifying employer and reputation risk creating a perfect storm, with many executives left exposed. The need to boost resilience is clear. Preparing for the worst and regularly testing and updating crisis plans is essential to managing some of the risks firms face today.”

William Clarke
Head of Underwriting Management - Cyber Risks