![\"10](\"https:\/\/www.shieldagency.com\/blog\/wp-content\/uploads\/2021\/10\/10-areas-businesses-should-address-to-mitigate-professional-lines-risks-in-an-evolving-world-Shield-Insurance-Agency-Blog.jpg\")
<\/figure>\n\n\n\nDownload the Risk Matrix<\/a><\/h2>\n\n\n\nHigher M&A volatility<\/h3>\n\n\n\n
One pandemic-era risk trend that continues to affect markets is the rise of mergers and acquisitions (M&A). Morgan Stanley reported that last quarter saw 1,250 M&A deals globally, totaling more than $1 trillion<\/a>. Contributing to the economic landscape are special purpose acquisition companies (SPACs), businesses expressly created to take other companies public and avoid the traditional IPO process. With SPACs, there can be a conflict of interest<\/a>, with one party trying to close the deal quickly and the other party focused on price. This conflict is leading to more litigation under federal security laws.<\/p>\n\n\n\nCyber and the board<\/h3>\n\n\n\n
In 2021 so far, 68.5 percent of businesses have already been victimized by ransomware<\/a>, according to Statista. And with more than 300,000 new pieces of malware created daily<\/a>, now is the time for boards of directors to address cyber risk needs. And for good reason: cyber risks are about more than private data; they imperil core operational functions and strategic objectives. It\u2019s never too early to get the board invested in cyber risk management<\/a>.<\/p>\n\n\n\nD&O risks for extreme weather<\/h3>\n\n\n\n
Severe weather events can push systems to their limit. When those systems fail, businesses and municipalities may be liable for claims relating to property damage, business interruption, and even loss of life. Directors and officers could be held liable if they fail to prepare for severe weather, much like we saw when\u00a0historic Winter Storm Uri left portions of Texas without heat or power<\/a>\u00a0for a week. \u00a0Government and municipalities can mitigate potential directors and officers’ (D&O) exposures by\u00a0conducting their due diligence<\/a>. Taking actions like staying up to date on climate data, evaluating and upgrading their current capacities against system failure, and having a continuity plan for emergencies can help organizations reduce their risk and keep the public safe.<\/p>\n\n\n\nRansomware<\/h3>\n\n\n\n
The threat of ransomware attacks is becoming more common\u2014in 2021 so far,\u00a068.5 percent of businesses have already been victimized<\/a>\u00a0by some type of attack. Digital connectivity is unavoidable for businesses as more turn to computers and online systems to get the job done. The inability to protect sensitive data could leave organizations in both legal and financial jeopardy and goes beyond just cyber exposure. For example, when a ransomware attack occurs at a healthcare facility, both patients and hospital operations can be impacted, resulting in\u00a0medical malpractice, product liability, and billing errors, and other regulatory liability concerns<\/a>.<\/p>\n\n\n\nProper due diligence<\/h3>\n\n\n\n
For more than a year, businesses across sectors pivoted to new functions and capabilities to keep up with the rapidly evolving economic landscape. While many pandemic-related restrictions are being lifted, the post-COVID-19 world poses a new set of risks that organizations will need to address. Whether companies are welcoming employees back to the office, entering into new vendor partnerships, or evaluating their geographic footprints, they need to do their due diligence<\/a>\u00a0and assess the potential exposures.<\/p>\n\n\n\nSocial responsibility<\/h3>\n\n\n\n
Businesses are\u00a0committing to environmental and social governance (ESG)<\/a>\u00a0more than ever before because consumers are looking to engage with corporations that take into account their impact on society at large. How a company treats its employees, addresses top-tier societal issues, and responds to current events can have a significant effect on overall performance. But if a company\u00a0fails to follow through<\/a>\u00a0on its promises, it can expose itself to a variety of risks\u2014loss of shareholders, employees, reputation and revenue can stem from poor ESG performance.<\/p>\n\n\n\nBankruptcy-related claims<\/h3>\n\n\n\n
With 2020 going down in history as the \u201cyear of COVID-19,\u201d\u00a0D&O inquiries<\/a>\u00a0and related claims continue to be at the forefront of many organizations\u2019 minds. Pandemic-driven macro-economic conditions have disrupted revenue and cash flow, resulting in debt covenant triggers and bankruptcy filings. Boards should be prepared for potential litigation arising out of such actions, and claims made against management alleging misconduct and\/or negligence in the performance of fiduciary duties are predicted to rise.<\/p>\n\n\n\nAudits of PPP loans<\/h3>\n\n\n\n
In response to economic instability caused by the COVID-19 pandemic, Congress passed the\u00a0Coronavirus Aid, Relief, and Economic Security (CARES) Act<\/a>. A key part of that act was the\u00a0Paycheck Protection Program<\/a>, or PPP, a low-interest loan backed by the Small Business Association (SBA) that would help businesses cover payroll and other operational expenses. As of May 31, 2021, the SBA has given out\u00a0more than $800 billion<\/a>\u00a0in PPP loans. And while most PPP recipients used their loans to stay afloat and support their workforce, some business owners used that money inappropriately. Now, the Department of Justice (DOJ) is beginning to look more closely at how these funds were being used. A business under investigation may look to its D&O insurance policy for support\u2014but it doesn\u2019t necessarily provide coverage<\/a>\u00a0in fraud-related government investigations.<\/p>\n\n\n\nInsurance ramifications from layoffs<\/h3>\n\n\n\n
Click here for the rest of the story<\/a>…<\/p>\n\n\n\n
\n\n\n\nCheck out the recent Shield Blogs…<\/h2>\n\n\n- How Life Insurance Can Support Long-Term Care Planning Without Replacing It<\/a><\/li>\n
- What Happens If Your Vehicle Is Totaled, Understanding the Auto Insurance Claims Process<\/a><\/li>\n
- Why Now Is a Smart Time for Michigan Businesses to Review Liability Coverage Before Spring Foot Traffic Increases<\/a><\/li>\n
- Snowstorms and Roof Damage: Is Your Michigan Home Covered?<\/a><\/li>\n
- Do You Need Recreational Insurance for Your Snowmobile in Michigan?<\/a><\/li>\n<\/ul>\n\n\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
From cybersecurity exposures and ransomware attacks to M&A volatility and securities litigation, a variety of evolving professional lines risks are affecting the management and professional liability market as the economy adapts in response to COVID-19. The Professional Lines Risk Matrix featuring 10 potential exposures affecting the professional lines market. The Risk Matrix, produced by the […]<\/p>\n","protected":false},"author":2,"featured_media":14984,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,1,2],"tags":[1768,15,31,1766,1765,1767,62],"class_list":["post-11215","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-blog","category-insurance","category-shield-blog","tag-audits-and-ppp-loans","tag-business","tag-commercial-insurance","tag-extreme-weather","tag-mitigate-professional-lines-risks","tag-ransomware","tag-shield-insurance-agency"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/11215","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/comments?post=11215"}],"version-history":[{"count":1,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/11215\/revisions"}],"predecessor-version":[{"id":11218,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/11215\/revisions\/11218"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/media\/14984"}],"wp:attachment":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/media?parent=11215"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/categories?post=11215"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/tags?post=11215"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
Cyber and the board<\/h3>\n\n\n\n
In 2021 so far, 68.5 percent of businesses have already been victimized by ransomware<\/a>, according to Statista. And with more than 300,000 new pieces of malware created daily<\/a>, now is the time for boards of directors to address cyber risk needs. And for good reason: cyber risks are about more than private data; they imperil core operational functions and strategic objectives. It\u2019s never too early to get the board invested in cyber risk management<\/a>.<\/p>\n\n\n\n Severe weather events can push systems to their limit. When those systems fail, businesses and municipalities may be liable for claims relating to property damage, business interruption, and even loss of life. Directors and officers could be held liable if they fail to prepare for severe weather, much like we saw when\u00a0historic Winter Storm Uri left portions of Texas without heat or power<\/a>\u00a0for a week. \u00a0Government and municipalities can mitigate potential directors and officers’ (D&O) exposures by\u00a0conducting their due diligence<\/a>. Taking actions like staying up to date on climate data, evaluating and upgrading their current capacities against system failure, and having a continuity plan for emergencies can help organizations reduce their risk and keep the public safe.<\/p>\n\n\n\n The threat of ransomware attacks is becoming more common\u2014in 2021 so far,\u00a068.5 percent of businesses have already been victimized<\/a>\u00a0by some type of attack. Digital connectivity is unavoidable for businesses as more turn to computers and online systems to get the job done. The inability to protect sensitive data could leave organizations in both legal and financial jeopardy and goes beyond just cyber exposure. For example, when a ransomware attack occurs at a healthcare facility, both patients and hospital operations can be impacted, resulting in\u00a0medical malpractice, product liability, and billing errors, and other regulatory liability concerns<\/a>.<\/p>\n\n\n\n For more than a year, businesses across sectors pivoted to new functions and capabilities to keep up with the rapidly evolving economic landscape. While many pandemic-related restrictions are being lifted, the post-COVID-19 world poses a new set of risks that organizations will need to address. Whether companies are welcoming employees back to the office, entering into new vendor partnerships, or evaluating their geographic footprints, they need to do their due diligence<\/a>\u00a0and assess the potential exposures.<\/p>\n\n\n\n Businesses are\u00a0committing to environmental and social governance (ESG)<\/a>\u00a0more than ever before because consumers are looking to engage with corporations that take into account their impact on society at large. How a company treats its employees, addresses top-tier societal issues, and responds to current events can have a significant effect on overall performance. But if a company\u00a0fails to follow through<\/a>\u00a0on its promises, it can expose itself to a variety of risks\u2014loss of shareholders, employees, reputation and revenue can stem from poor ESG performance.<\/p>\n\n\n\n With 2020 going down in history as the \u201cyear of COVID-19,\u201d\u00a0D&O inquiries<\/a>\u00a0and related claims continue to be at the forefront of many organizations\u2019 minds. Pandemic-driven macro-economic conditions have disrupted revenue and cash flow, resulting in debt covenant triggers and bankruptcy filings. Boards should be prepared for potential litigation arising out of such actions, and claims made against management alleging misconduct and\/or negligence in the performance of fiduciary duties are predicted to rise.<\/p>\n\n\n\n In response to economic instability caused by the COVID-19 pandemic, Congress passed the\u00a0Coronavirus Aid, Relief, and Economic Security (CARES) Act<\/a>. A key part of that act was the\u00a0Paycheck Protection Program<\/a>, or PPP, a low-interest loan backed by the Small Business Association (SBA) that would help businesses cover payroll and other operational expenses. As of May 31, 2021, the SBA has given out\u00a0more than $800 billion<\/a>\u00a0in PPP loans. And while most PPP recipients used their loans to stay afloat and support their workforce, some business owners used that money inappropriately. Now, the Department of Justice (DOJ) is beginning to look more closely at how these funds were being used. A business under investigation may look to its D&O insurance policy for support\u2014but it doesn\u2019t necessarily provide coverage<\/a>\u00a0in fraud-related government investigations.<\/p>\n\n\n\n Click here for the rest of the story<\/a>…<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" From cybersecurity exposures and ransomware attacks to M&A volatility and securities litigation, a variety of evolving professional lines risks are affecting the management and professional liability market as the economy adapts in response to COVID-19. The Professional Lines Risk Matrix featuring 10 potential exposures affecting the professional lines market. The Risk Matrix, produced by the […]<\/p>\n","protected":false},"author":2,"featured_media":14984,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,1,2],"tags":[1768,15,31,1766,1765,1767,62],"class_list":["post-11215","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-blog","category-insurance","category-shield-blog","tag-audits-and-ppp-loans","tag-business","tag-commercial-insurance","tag-extreme-weather","tag-mitigate-professional-lines-risks","tag-ransomware","tag-shield-insurance-agency"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/11215","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/comments?post=11215"}],"version-history":[{"count":1,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/11215\/revisions"}],"predecessor-version":[{"id":11218,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/11215\/revisions\/11218"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/media\/14984"}],"wp:attachment":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/media?parent=11215"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/categories?post=11215"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/tags?post=11215"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}D&O risks for extreme weather<\/h3>\n\n\n\n
Ransomware<\/h3>\n\n\n\n
Proper due diligence<\/h3>\n\n\n\n
Social responsibility<\/h3>\n\n\n\n
Bankruptcy-related claims<\/h3>\n\n\n\n
Audits of PPP loans<\/h3>\n\n\n\n
Insurance ramifications from layoffs<\/h3>\n\n\n\n
\n\n\n\nCheck out the recent Shield Blogs…<\/h2>\n\n\n