The CEO of Better.com, an online mortgage financing company, went viral on social media in 2021 when he collectively fired 900 of his employees on one zoom call.
Although the criticism back then gradually died down after his subsequent apology, the CEO once again made headlines recently as he got sued by an ex-employee for allegedly misleading investors.
The company’s former Executive Vice President for sales and operations filed a lawsuit on 7 June 2022 against the company and its CEO for misrepresenting its financial statements to get investors to agree to an upcoming $7.7 billion merger.
The former executive has asked for compensation alleging that she was removed from her role for raising concerns about the deal.
Denying all allegations of financial wrongdoing, Better.com has stated that it is confident in the integrity of its practices and will “vigorously defend this lawsuit” levelled against it.
Lawsuits like these are often damaging for a company, both in terms of its finances and market reputation. While there are no straightforward solutions for the latter, financial losses can be easily recovered by businesses through insurance.
A Directors and Officers Insurance policy, in particular, provides financial protection to businesses against expensive lawsuits claiming negligence or wrongdoing on the part of a company executive.
This policy covers cost of defence, court fees, as well as any compensation that becomes payable to the claimant.
Most businesses these days, especially those operating in the tech space, opt for this policy to safeguard their finances for all contingencies.