Unintended Risks of Social Movements | Claims Magazine

Social movements have revealed the systemic issues of discrimination, as evidenced by upticks in claims and allegations made in the public domain.

Social-movements-unintended-risks

By Kim Noble, CPCU

Reprinted with permission from the April 2019 issue of Claims Magazine. ©2019 ALM Media Properties, LLC. Further duplication without permission is prohibited.  All rights reserved.

This article also appears online at PropertyCasualty360.com.

Social movements have attracted much attention in recent years. Movements such as #MeToo, Time’s Up and Black Lives Matter are just a few modern examples of social justice movements with strong intentions to reform the status quo in industries once thought of as impervious like Hollywood, media, sports and government. These movements have revealed the systemic issues of discrimination, sexism and sexual harassment in nearly every area of the professional world, as evidenced by the upticks in claims and allegations being made in the public domain.

Nevertheless, the innocuous actions of these movements to push for a more equitable and safer environment for humanity have, in fact, had unanticipated counter-effects on equality and diversity initiatives for public and private companies, when looked at through a professional liability lens.

Potential liability impacts

To dive deep into this critical issue, a discussion at the 2018 PLUS International Conference in November 2018 addressed the hidden risks of social movements, including how they could upend a company’s culture and retention initiatives, ultimately impacting the diversity and equilibrium of the employee base and potential talent profile.

#MeToo and Time’s Up exposed the misbehavior of professionals from the corner office to the cubicle. As a result, many professionals were exposed and often terminated. While disrespectful behavior toward anyone in the workplace is unacceptable, what has also surfaced since the onset of these exposures are the hidden professional liability risks stemming from the well-intentioned changes these movements aim to have on society.

Stress among diverse talent

Employment claims brought against companies as a result of inappropriate workplace behavior have a high probability of impacting not only the company’s current employee base, but the future talent pool as well. For example, a sexual harassment scandal and the reputational implications may endure long after a claim is resolved, resulting in an adverse effect upon current employees and the pool of potential candidates. This, in turn, may disrupt the balance of diverse employees. In addition, this type of outcome can be detrimental to a company’s bottom line, as traditionally male-dominated industries like finance and technology seek to broaden their talent base to hire, train and retain women and minorities.

The professional liability impact of such exposures has also resulted in significant stress to and in some situations, impairment of professionals, especially among female employees. This consequence has ultimately led to a lower quality of work, productivity and morale, at times leading to high levels of turnover among valuable and diverse talent pools.

Fear is divisive and counterproductive to the progress social movements intend to accomplish; yet, it is, unfortunately, one of the most significant hidden risks arising from them.

Career advancement challenges

Loss of career and training opportunities are also hidden risks professionals are grappling with as a result of social movement outcomes. According to the National Law Journal, 56% of men are nervous about one-on-one interaction with women at work, based upon a concern for the potential for allegations of impropriety to occur. Meanwhile, women and minorities may feel left out of advancement opportunities, such as socializing with bosses and mentors, due to those concerns. According to a Pew Research Center survey, women are roughly four times as likely as men to say they have been treated as if they were not competent because of their gender.

Environment of fear

Many employees today find themselves in a workplace environment that is characterized by fear — a situation that is causing a reduction in collaboration and mentoring in the workplace and is preventing employees from achieving their career goals. Indeed, employees are no longer taking advantage of mentors and advisors due to fear of misconduct and the potentially serious consequences that could result from it. Fear is divisive and counterproductive to the progress social movements intend to accomplish; yet, it is, unfortunately, one of the most significant hidden risks arising from them.

The insurance industry must now work to align the new pieces of the risk management puzzle brought on by these social movements. Currently, there are more questions than answers, as insurers aim to get people thinking — what could be the future risk management implications of these social movements? What type of risk mitigation techniques could be applied to effectively manage the potential exposures?

Insurers need to be active participants in the discussions that address those types of issues that may have consequences for certain types of insurance coverage. We should proactively seek to identify and understand the risks and respond as forward-thinkers to develop the right solutions to mitigate these risks.

Kim Noble (knoble@argoprous.com) is senior vice president of the accountants and lawyers professional liability units at Argo Pro. Noble has more than 20 years of professional liability experience, both as outside counsel and in underwriting management roles.

Read more about The Hidden Risks of Social Movements.

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