President, Blais Insurance
While
most of the discussions around the #MeToo movement have focused on the culture
of sexual harassment in the entertainment industry, the movement is expected to
cause ripples in the liability insurance market as more women come forward with
allegations of misconduct at local levels. As the global phenomenon gains
traction, Blais Insurance would like to share information on how the movement
can influence rates in the liability insurance marketplace.
For
individuals who are unfamiliar with the #MeToo movement, the hashtag started
trending after several high-profile women renounced Hollywood executives on
Twitter who made unwanted sexual advancements during their acting careers. Men
in positions of authority were lambasted and many lost their endorsements, position,
reputation or all three.
Just
when it looked like the movement would go away on its own, #MeToo started to
flare up on social media again during International
Women’s Day and became a global discussion that is now taking place across 196
countries. More importantly, the movement has made it acceptable for women to openly
talk about sexual harassment they may have faced at work — whether they are in
the healthcare industry or working in a restaurant.
Insurance
experts anticipate the movement will have ramifications for the private
directors and officers liability insurance (D&O) market — a type of
insurance that covers the legal costs of managers who allegedly performed
wrongful acts while working for their employer.
While
all allegations of sexual misconduct should be taken seriously, employers are
more likely to be in hot water if the wrongful act occurred between a
supervisor and a subordinate. Lawsuits of this nature may emerge from incidents
involving a disrespectful remark, an inappropriate glance, or denying a
promotion for arbitrary reasons.
Since
rates are determined in part by the volume of claims nationwide or in a
specific geographic area, #MeToo may inadvertently influence more people to
file claims. If this were to happen, there is a possibility that D&O
insurance premiums will increase as well.
Another
possibility is that insurers will begin denying requests for D&O insurance
packages if those employers are known for having a culture of sexual
harassment. Employers will need to make concerted efforts demonstrating that they
are doing what is necessary to mediate the problem.
With
47 percent of America’s workforce being women — equating to roughly 74 million
women according to the U.S. Department of
Labor
— Blais Insurance warns employers that no matter the industry we might see the movement
gain a foothold in pockets across New England. The potential for a large volume
of claims could make insureds scrutinize employee handbooks. More likely than
not, underwriters would be instructed to pay close attention to how employers
address issues of sexual harassment.
With
a team of dedicated professionals, Blais Insurance has been providing
businesses and families with insurance solutions for more than 100 years. If
you are interested in reevaluating your policy or are concerned that your
business is not fully protected in this climate, speak with one of our agents
at 401-725-0070.
