D&O LIABILITY SCORECARD
Director & Officer
Liability Scorecard
BY: COOKE
INSURANCE GROUP
Understanding Your Level Of Risk
C
laims against directors
and officers are becoming
increasingly common. In fact,
according to recent estimates,
one out of every three
Canadian businesses have faced a claim
related to their directors and officers in the
past decade. Your business and its directors
and officers could be sued by customers,
current or former employees, competitors,
regulators, creditors, vendors, or even
investors. What’s more, this can happen
even if your organization is not a large,
publicly traded company.
The cost of defending directors and officers
(D&O) claims can run well into the six
figures, leaving a business financially
crippled. Even worse, your directors and
officers put everything they have on the
line since even their personal assets may be
at risk in the event of a D&O liability claim.
As a result, D&O liability insurance has
become an essential component of most
businesses’ insurance portfolios.
Instructions: Please note that each section
will have its own instructions related to
scoring. Please review them carefully. After
you have completed all of the sections to
the best of your ability, add up your score
and determine your level of risk by utilizing
the chart at the end of this document.
SECTION INSTRUCTIONS
The following points will be assigned for
each response:
To help businesses better understand the
level of risk their directors and officers face,
Cooke Insurance Group has developed this
Directors and Officers Liability Scorecard.
BUSINESS OPERATIONS & HISTORY
YES: 4 POINTS
NO: 0 POINTS
UNSURE: 4 POINTS
YES NO UNSURE
1. At any point in the past five years, has your business experienced any changes in
senior management? q q q
2. At any point in the past five years, has control of your business changed hands or
been offered for sale? q q q
3. At any point in the past five years, has your business accepted outside investments? q q q
4. At any point the past five years, has your business filed for bankruptcy or breached
any of its debt covenants, loan agreements or contractual obligations? q q q
5. At any point in the past five years, has your business or one of its directors, officers
or employees been involved in a labour- or employee-related dispute or been accused
of harassment or discrimination? q q q
6. At any point in the past five years, have any competitors, current or former
employees, customers, suppliers, contractors or other third parties brought suits
against your business for alleged wrongdoing? q q q
7. At any point in the past five years, has your business made layoffs or staff
reductions? q q q
8. At any point in the past five years, has your business been involved in any proposed
or completed mergers, acquisitions or divestitures? q q q
9. At any point in the past five years, has your business made a substantial change to
its operations or sources of revenue? q q q
10. At any point in the past five years, has your business hired an employee who had
access to proprietary information, trade secrets other forms of confidential business
information at his or her previous job? q q q
11. At any point in the past five years, have any of your directors or officers made a
material representation to potential investors, customer, contractors, suppliers or third
parties? q q q
SECTION SCORE:
26
26
SCORE