Are You Covered For Executive Malpractice?

What if a current or former CEO is sued by laid-off employees claiming economic harm caused by executive incompetence? Should those in the C-Suite face the same malpractice exposure as other professionals, and if so, how might the directors and officers insurance market respond? Those were some of the questions raised by a recent episode of the ABC legal dramedy, “Eli Stone.”

For those who haven’t seen the show before, Eli Stone is a top-notch corporate lawyer whose life is changed by an aneurysm that gives him visions of the past and future. Convinced he’s been made into a prophet by God, he begins representing the weak and vulnerable, rather than the rich and powerful.

In the July 4 episode, Eli’s firm seeks certification of a class action on behalf of some 300 people who lost their jobs after the company dismissed its CEO for bad management–but not before paying him over $200 million in annual compensation, and providing an additional $43 million in a severance package.