The COSO Framework for Internal Control
February 12, 2025
There are 7 C’s of effective communication which are applicable to both written as well as oral communication. These are as follows: Completeness – The communication must be complete. It should convey all facts required by the audience. The sender of the message must take into consideration the receiver’s mind set and convey the message […]
Incentive is an act or promise for greater action. It is also called as a stimulus to greater action. Incentives are something which are given in addition to wagers. It means additional remuneration or benefit to an employee in recognition of achievement or better work. Incentives provide a spur or zeal in the employees for […]
Shannon and Weaver model is the most popular model of communication and is widely accepted all over the world. Let us first go through the following example to understand the model better. Peter is working as Vice president – Marketing with a reputed multinational firm. He is currently heading Mike who in turn is taking […]
A discussion among individuals to reach to an alternative which involves the interest of all the participants is termed as negotiation. An individual must try his level best to negotiate with each other and reach to a common conclusion to avoid conflicts and misunderstandings. In a win win negotiation both the two parties are benefited […]
Negotiation is defined as a discussion among individuals to reach to a conclusion acceptable to one and all. It is a process where people rather than fighting among themselves sit together, evaluate the pros and cons and then come out with an alternative which would be a win win situation for all. Sam wanted to […]
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 *