Thursday, April 12, 2018

How #MeToo Might Affect You!

By: Edward L. Blais, JD, CIC

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.