The COSO Framework for Internal Control
February 12, 2025
Under normal circumstances, a reinsurance company operates as a partner with its ceding insurance company. The reinsurance company wants to ensure that good service is provided to the insurance company and that losses are shared as per the contract. The reinsurer has a vested interest in providing customer service i.e. the reinsurer expects the ceding […]
Most individuals buy insurance policies through insurance agents. These insurance agents are often individuals who work on behalf of one or multiple insurance companies. On the other hand, corporations usually tend to buy insurance from insurance brokers. Individual buyers have often heard of insurance brokers such as Willis, Aon Marsh, etc. However, they don’t know […]
Etiquette helps human beings to behave in a socially responsible way. Etiquette helps you gain respect, trust and appreciation from others. There is a huge difference between an individual’s college and professional life. One needs to follow a proper dress code at the workplace for the desired impact. It is essential to dress appropriately at […]
Corporate decision making happens at various levels in organizations and can be top down or bottom up. The difference between these two styles of decision making is that the top down decision making is done at the higher levels of the hierarchy and the decisions are passed down the corporate ladder to be implemented. On […]
Risk and control self-assessment (RCSA) is an internal procedure used to identify, assess, and mitigate operational risks within a company.1 In this article, we will discuss the purpose and benefits of this process, before exploring the key stages involved in conducting a thorough RCSA. What is the Purpose of an RCSA? Regular engagement in RCSAs […]
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 *