Mark Zuckerberg, CEO of Meta, the parent company of Facebook, has been sued by Washington DC’s Attorney General over his alleged involvement in the Cambridge Analytica data breach that came to light back in 2018.
Facebook and the now-defunct political consultancy firm Cambridge Analytica had come under intense scrutiny in 2018 when the latter harvested the private data of up to 87 million Facebook users. They then used this data to influence voter behaviour in the 2016 presidential campaign of Donald Trump.
Now, Zuckerberg is being sued for his direct involvement in the decision-making that led to the data breach. Based on statements taken from employees and whistleblowers, Zuckerberg is being accused of failing to protect users’ privacy and data by giving Cambridge Analytica unlawful access to them.
This is not a solitary lawsuit associated with the Facebook-Cambridge Analytica scandal. Infact, Facebook had been fined a record $5 billion earlier for violating consumers’ privacy. So, how will Zuckerberg handle this one?
Well the thing is, most CEOs and executive managers are shielded against the financial damage from these types of lawsuits with the help of a Directors and Officers Liability policy.
D&O Insurance, as it’s called, covers lawsuits claiming negligence or wrongdoing on the part of a business’s directors and chief officers during their decision making process. This policy essentially helps businesses pay for legal expenses and damages to the claimants.
Although it is unlikely that a lawsuit would put a huge dent in Zuckerberg’s finances, for smaller businesses they can be particularly harmful. And so, for most enterprises, D&O Insurance becomes paramount.