The Role of Insurance in #MeToo Movement
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.
Are Sexual Harassment Claims Covered Under Insurance Policies?
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:
Which Executives are Liable to Pay Damages?
A wide variety of company executives may become a party to sexual harassment claims. Some of the common roles are listed below.
What Kind of Damages do These Insurance Policies Cover?
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.
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.
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