The company typically receives the payout to cover losses from whatever incident precipitated the claim. This isn’t hypothetical. Companies already do this. For example, a company could get hacked and extorted for ransom. They can file a claim and use the payout to pay the ransom. Or a manager makes a mistake that results in a lawsuit, settlement, defense costs, etc. The company can file a claim against a management liability policy.
What’s new that I’m proposing is to require companies to carry insurance and list accountable people on the policies so that claim history is associated with their decisions. Many companies already have management liability and/or cybersecurity policies, but it’s typically optional and individual decision makers aren’t listed on the policy. The claim history is associated only with the company and never the people who made the decision. That’s why they can just leave and do the same thing somewhere else.
alt Hacker News
The company typically receives the payout to cover losses from whatever incident precipitated the claim. This isn’t hypothetical. Companies already do this. For example, a company could get hacked and extorted for ransom. They can file a claim and use the payout to pay the ransom. Or a manager makes a mistake that results in a lawsuit, settlement, defense costs, etc. The company can file a claim against a management liability policy.
What’s new that I’m proposing is to require companies to carry insurance and list accountable people on the policies so that claim history is associated with their decisions. Many companies already have management liability and/or cybersecurity policies, but it’s typically optional and individual decision makers aren’t listed on the policy. The claim history is associated only with the company and never the people who made the decision. That’s why they can just leave and do the same thing somewhere else.