As a member of the executive leadership team of an organization, there are certain responsibilities that fall under your umbrella whether they are explicitly stated or implied. As an owner of your business or even a board member of an organization, you are responsible for the management of your company’s affairs. That responsibility comes with the possibility of being sued if something is mishandled and leads to damage or injury. This is why we at S2S Insurance strongly urge business owners and managers to obtain directors and officers insurance. The cannabis industry is steadily growing as more and more states legalize cannabis. The growth of the industry requires more advanced risk management strategies due to the advanced risks that exist.
Companies large and small, public and private, for-profit and nonprofit all face director and officer (D&O) litigation risks. In a 2016 survey by Chubb, the average reported loss from a directors and officers judgment was $387,000. No matter how successful your cannabis related business is, the reality is that a substantial financial loss such as $387,000 could destroy your company instantly, or set you back to a point that may be difficult to recover from. If you are a director or officer at your organization, you could be sued for any number of reasons, including breach of fiduciary duty resulting in financial losses or even bankruptcy, fraud, failure to comply with workplace laws, lack of corporate governance to name a few. These suits can come from a variety of places including but not exclusive to employees, vendors, competitors, investors and of course customers.
A board member at GlaxoSmithkline is one of those being sued by the US state of Massachusetts over the US opioid addiction crisis.
The lawsuit seeks damages from 16 individuals, many of whom are members of the Sackler family, and Purdue.
“The Attorney General claims Purdue acted improperly by communicating with prescribers about scientific and medical information that FDA [the US Food and Drug Administration] has expressly considered and continues to approve,” it said.
In March a study by a federal agency found that opioid overdoses were up 30% over the previous year in the US, with Midwestern states having the highest jump in cases.
The Massachusetts lawsuit alleges that Purdue Pharma, the company behind the drug OxyContin, “created the [opioid] epidemic and profited from it through a web of illegal deceit”.
Ms Lewent was named in the lawsuit as one of those “who oversaw and engaged in a deadly, deceptive scheme to sell opioids in Massachusetts.”
No business owner wants to find him or herself in court dealing with a directors and officers law suit, but there are precautions every business owner can take to help protect him or her self and their business in these situations. It is critical that as a director or officer of your company you consider investing in D&O insurance. Directors and officers liability insurance protects your personal assets along with your spouse’s if you are sued for mishandling the management of your company. S2S Insurance specialist, Eric Rahn, states “don’t make the mistake of assuming you are protected under your general liability policy when it comes to D&O insurance.” You should always review your policy with one of the marijuana insurance specialists at S2S Insurance and your attorney. Contact us today and we can begin to assess your risk and provide options to help you maintain a successful business no matter what might occur down the road.