The COSO Framework for Internal Control
February 12, 2025
If proper procedures are the foundation of a high-performance team, then clear and open communication is the roof. Clear and honest communication between the team members and the management is the backbone for the survival of a high-performance team. It acts as a glue that binds all the team members together. Effective communication helps in […]
The dialogue between individuals to come to a common conclusion benefiting all is called as negotiation. Negotiation refers to the discussions among individuals evaluating the pros and cons of a situation and coming to an alternative best suited to all. In negotiation, individuals try their level best to come to a conclusion which would satisfy […]
Communication plays a crucial role in not only overcoming challenges in leadership but also strengthening the bond among employees. Bosses need to communicate with their subordinates and guide them whenever required. It is essential for the team managers to remain in constant touch with their team members. What are the common problems faced by team […]
The line agency in its traditional form exists as departments. Departments are the fundamental unit of administrative organizations and carries out all the functions. There are different shortcoming and problems associated with this structure as well but before we dwell into that, we shall make an attempt to understand the basic principles on which the […]
Long term memories last for a longer period of time as it has the capacity to store information for a relatively longer period of time and retrieve the same whenever required. Some of the important facts related to long term memory which should be known are provided below: Long term memories usually remain out of […]
In 2017, Forbes magazine named #MeToo movement as the “person of the year.” This is because the #MeToo movement has shaken the corporate world to its very core. It is a sad fact that sexual harassment still remains a reality in the workplace.
For instance, it is estimated that at least one in three women who work in a full-time job will face some sort of sexual misconduct during the course of their lives.
These numbers are alarming. What is even more alarming is that high flying corporate executives and media personnel were caught up in this #MeToo storm. In some cases, the alleged sexual harassment did actually take place whereas, in others, the women involved were looking to make a quick buck.
Regardless of the final verdict, it needs to be understood that allegations made under the #MeToo movement can have serious financial consequences. In this article, we will have a closer look to understand how insurance can be used to mitigate some of the losses that may arise because of such claims.
In most cases, sexual harassment claims are indeed covered by an insurance policy. This is because it is standard practice for most companies to have directors and officers insurance policy. This policy is meant to protect the key personnel of a company against any claims including claims of sexual misconduct.
However, in many cases, expenses arising as a result of sexual harassment claims may not be covered. Typical examples of these cases are as follows:
Extended workplace means any place where the key personnel are supposed to be present in relation to their work. This includes places such as airports, hotels, etc. Hence, if the alleged sexual misconduct incident happened off business hours and in a place not connected to the business, insurance companies may deny making any claim payments
A wide variety of company executives may become a party to sexual harassment claims. Some of the common roles are listed below.
Sexual harassment claims lead to a wide variety of financial losses for the company. Any expense which can be directly attributed to the sexual harassment claim is usually covered by the insurance policy.
Insurance companies usually cover the fees associated with such defense cases. This may include payments related to lawyers’ fees as well as money charged by private investigators (if any)
It is important to understand that insurance companies are required to help protect the clients regardless of whether sexual misconduct has actually taken place.
Hence, insurance payouts will be applicable regardless of whether the defendant is found guilty or not. However, it also needs to be understood that most insurance companies levy a cap on the amount which they will pay under the directors’ and officers’ policy. Once this amount is exhausted, the insurance company will not be liable to make any more payments.
Your email address will not be published. Required fields are marked *