Make Sure Of Liability Cover, Chubb Warns Women Execs

Dr. Firestone said, "As women have successfully built their businesses, they have been faced with many challenges. Their optimistic outlook, in conjunction with their business savvy, has been essential to their success."

She explained that, "Faced with yet another challenge as a result of the current economic environment, WPO members–owners of multimillion dollar businesses–recognize that future revenue growth requires that they change the way they do business by broadening their product or service offerings, opening new offices, expanding their global reach and developing innovations."

Lisa Jones, vice president, Chubb & Son, and private commercial product manager for Chubb Specialty Insurance, noted however that, "the very same activities that will help these women grow their businesses may also increase their companies' exposure to a liability lawsuit."

"Small to medium-size firms with more limited resources may be particularly vulnerable to the costs associated with a liability lawsuit," she warned.

The survey found 54 percent of respondents saying their companies are likely to broaden product offerings in 2009. "New products bring new opportunities for growth," said Jones, "and opportunities for product liability and errors and omissions claims."

Thirteen percent said they would add international offices. "Although this enhanced multinational footprint can help further grow revenues, it may also create property exposures and open the door to liability lawsuits in countries with laws and regulations that differ from those in the United States," said Ms. Jones.

She also noted that links in a company's global supply chain will be under pressure to cut costs. As a result, many suppliers may be forced to lay off workers and products may not be thoroughly inspected, increasing the risk that defective materials could travel through the supply chain to the finished product.

She noted that in 2007, the U.S. Consumer Product Safety Commission reported the largest number of voluntary recalls (472) in the past decade, and about two-thirds of all U.S. consumer product recalls involved imported products.

"Supply chain management has become a very complex issue," said Ms. Jones. "To help prevent a product liability lawsuit, know your supply chain and their supply chain. Make sure their corporate values and safety standards align with yours."

Among survey respondents 24 percent indicated that in 2009 their companies are likely to outsource functions or operations, 19 percent said they are likely to reduce their workforce and 13 percent mentioned a reduction or elimination of some employee benefits.

"Anticipating continued economic turmoil, survey respondents foresee making changes to make their businesses more competitive. However, economic conditions can have a negative impact on employment-related claims and lawsuits," said Ms. Jones.

"Although a majority of the survey respondents (89 percent ) indicated that they are not concerned about employment practices liability risk increasing in 2009, our experience has shown that when companies lay off employees or reduce employee benefits, there is generally a corresponding spike in employment practices liability lawsuits, as well as incidents of workplace violence," she advised.

The "2008 Business Risk Survey" was conducted in October 2008 on the Internet. The survey queried 160 women chief executive officers and presidents who are members of the Women Presidents' Organization. The WPO is a non-profit peer advisory membership organization for women presidents of multimillion-dollar companies.