Sometimes you get more than you bargain for. When you agree to volunteer on a board, for example, you might expect to contribute to your community while proving your leadership skills and increasing your professional network. You’ll get all of that and a heavy dose of risk.

This doesn’t mean that you shouldn’t volunteer. There’s a lot to gain from serving on a board. However, it’s important to be aware of some common D&O exposures you could be facing in the process.

Cyber Liability

You’ve heard about the rise of data breaches, ransomware attacks and other cyber threats. People are growing increasingly concerned about their personal data, and new regulations – like the GDPR and the California Consumer Privacy Act – are being created to provide protection.

When a cyber incident occurs, the organization (and the officers who direct it) can be held responsible for failing to prevent it. Just ask the people at Yahoo. Earlier this year, the company reached a $117.5 million settlement over a data breach.

Every organization has cyber exposures. Given this, it’s not surprising that cyber is currently ranked as the number one liability risk according to Willis Towers Watson’s 2018 Management Liability (Directors and Officers) U.S. Survey.

Harassment and Discrimination

Lawsuits alleging sexual harassment are on the rise. The Equal Employment Opportunity Commission reports filing 50 percent more claims in 2018 compared to 2017. The increase appears to be the result of the #MeToo movement, which took off after the Harvey Weinstein sexual harassment and assault scandal became known.

Awareness of harassment and discrimination have increased and people are not willing to look the other way. Individuals accused of misconduct may face lawsuits, as will organizations accused of trying to cover up problems or retaliate against whistleblowers. Directors and officers should provide leadership on these issues and failure to do so is expected to lead to D&O lawsuits.


Regulatory bodies are another source of D&O claims. Modern organizations need to comply with multiple regulations, which are constantly evolving.

Even charitable organizations have to deal with regulations. In fact, their non-profit nature – and tax-exempt status – might expose them to even more regulations and financial scrutiny.

Limiting Risk

Board members are given the important task of making sure an organization is running well. This responsibility must be taken seriously. Board members should read the bylaws carefully and educate themselves on relevant regulations. They should also make sure they’re protected with D&O insurance, which will provide coverage in case a D&O claim is made.

Need D&O coverage? BNC Insurance can help. Contact us to learn more.

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