D&O Insurance: Murdochs Testify in Phone Hacking Case

D&O Insurance: Murdochs Testify in Phone Hacking CaseJames Murdoch, the youngest son of media mogul Rupert Murdoch testified for five hours in early April at a British judicial inquiry delving into the News of the World phone hacking scandal, according to the New York Times.

News of the World, a British newspaper owned by Rupert Murdoch’s News Corporation was closed when it was revealed the publication’s journalists invaded individual’s voicemail accounts, including a 13 year old murder victim and relatives of fallen soldiers in Iraq and Afghanistan.

The repercussions of the scandal were monumental. News of the World was closed, and numerous inquiries ensued. A huge portion of the scrutiny rested on James Murdoch, who was in charge of European operations for the News Corporation, and Rupert Murdoch. James Murdoch stepped down as executive chairman of News International, the British newspaper subsidiary entangled in the scandal.

The pair faces extensive public scrutiny on their handling of the scandal. The phone hacking scandal came just as Murdoch was trying to win approval for a 12 billion dollar bid to acquire the BSkyB network; the deal was not approved and many have questioned the seemingly cozy relationship between top corporate executives and elected officials. Both James and Rupert Murdoch testified in court in late April; James Murdoch maintains a steadfast stance that he had no knowledge of the hackings.

The pressure on the two top executives is huge. One Labour party lawmaker has called for the Murdoch’s suspension from running the company. Whether are not either knew about the hacking scandal, they are the public figureheads of a company, and have the largest responsibility. They also face the biggest risk.

The pressure surrounding the Murdochs is a cautionary reminder for business owners to take measures to protect their top executives. Directors and Officers insurance can provide protection against the costs of legal defense and indemnity coverage for the business, directors and officers and employees in suits alleging internal mismanagement.

If organizations are not prepared to financially absorb the potential costs of such litigation, D&O insurance becomes a necessary choice. Let the experienced D&O specialists at Capital Insurance in Michigan protect your assets and your business. Contact us for more information today.