The Top Ten Reasons Why Private Company Directors and Officers Need D&O Insurance.

1. Involvement in day-to-day operations makes private company directors and officers particularly vulnerable to claims brought by employees.

2. Third party discrimination claims, brought by customers and clients, are increasingly common in today’s society.

3. D&O Insurance from a quality insurer can take private companies through their IPO and into public ownership well protected.

4. Complex claims brought by competitors, such as antitrust and unfair competition claims against directors and officers, can generate sky high defense and settlement costs.

5. Investigations by government and regulatory agencies can generate enormous defense costs – even if no wrong doing is found.

6. Company assets can be closely tied to personal wealth of directors and officers, making claims brought solely against the company vital.

7. When the company cannot indemnify its directors and officers in D&O claims, D&O insurance can step in instead.

8. Shareholders of private companies frequently sue for inadequate or inaccurate disclosure in financial reports and statements made in private placement materials.

9. D&O insurance can protect the personal assets of the directors and officers spouse, as well as the assets of a diseased director and officers estate.

10. With D&O insurance in place, management can focus on managing the company, rather than managing a protracted litigation.

A Great Example of Why Employment Practices Liability Insurance is Important to Your Business and Relevant in This Day and Age!

Restaurant Pays $170,000 To Settle Sexual Harassment Lawsuit


Chilbo Myunok USA LLC, a Korea-based food company which owns a Los Angeles restaurant and a chain of fast-food stores in Korea, pays $170,000 to settle a sexual harassment lawsuit filed by the Equal Employment Opportunity Commission ("EEOC") on behalf of a class of waitresses. According to published reports the waitresses were sexually harassed at the Chilbo Myunok restaurant and four of them were forced to quit to escape the harassment--this is commonly referred to as a constructive discharge. When the harassment gets too severe and a person can no longer work because of the harassment they are forced to quit and this is a separate discriminatory act that is compensatable.

Details of the lawsuit include the victims facing continuous verbal and physical sexual harassment from the restaurant's manager. The manager, who has since been fired, repeatedly subjected the women to sexual touching with a sexual device and to unwanted hugging and kissing. The EEOC many times will take up cases where there are more than one victim and they can get more bang for the buck. If there were only one waitress the chances are the EEOC would issue a right to sue letter and the waitress would be left to hire a private attorney to continue the lawsuit. In Illinois I prefer to file directly with the Illinois Department of Human Rights ("IDHR") which automatically cross-files with the EEOC. I believe the IDHR does a faster and more thorough job than the EEOC of investigating individual charges.

"By working with EEOC this way, Chilbo Myunok has clearly shown its commitment to making needed changes to policies and practices to ensure equal employment opportunities for all of Chilbo Myunok's employees," said EEOC's Perry.