Families with vast wealth often have a family office for legal, financial, administrative and philanthropic operations. These group office professional situations come with their own set of liabilities and risk factors.
There are many federal laws and statutes affecting the way employees are treated in the US. Private companies must follow the same guidelines and can be held liable for defamation, discrimination, wrongful discharge and harassment by employees.
Directors and Officers
The interests of the family are often represented by an officer or director at the family office. Much like a director or officer at a public company, family office executives’ misjudgment can negatively affect a family member. That officer can then be held liable for that misjudgment.
If the family office has professionals on staff or for hire, the management risks rise. The type of services the family office conducts for others can also affect the liabilities of the office.
Indemnification can offer some protection but does not come without limitations. Insurance offers more comprehensive coverage to protect against a variety of liabilities and exposures facing family offices.
An agent can go over the group office professional liabilities of your particular family office. Each family office has its own focuses and needs. Assessing the risks ahead of time can save the family office money and reduce litigation.