Liability Insurance Contributing Columnist


Minding Your P’s & Q’s With Your
D’s & O’s

Jen Pino-Gallagher
Director of Food & Agribusiness Practice
M3 Insurance

October 11, 2019


For centuries, the origin of “Mind your P’s & Q’s” and its exact meaning have been debated. People in the publishing business say the origin lies in the typesetting days. The lowercase letters p and q were difficult to tell apart in the lead-type pieces that printers used to build words, sentences, and paragraphs.

Some say it served as a reminder for children to remember their “please” and “thank-yous” when venturing out in public.
Regardless of which definition you subscribe to, the meaning of “be ready, be prepared” and “take care” are generally accepted.

The adage holds true with any individual who is considering accepting a position as a board member for a dairy processor. The board member must be prepared for the fiduciary responsibility and the personal liability that they assume by taking on the role.
In the summer of 2019, a high-profile court case in Delaware, Marchand v. Barnhill, made the potential liability that board members and executive leadership assume when leading a food company vividly clear.

In this case, the Delaware Supreme Court issued a unanimous decision on a stockholders derivative suit against one of the country’s largest ice cream manufacturers.

The case arose after the manufacturer distributed listeria-contaminated ice cream. The contaminated product resulted in numerous illnesses, a total product recall, and, sadly, three deaths.

A stockholder of the company filed suit against two key executives and the company’s directors claiming that breaches of the defendants’ fiduciary duties caused the stockholder financial harm. The decision in favor of the plaintiff (stockholder) stated that the board of directors failed to provide adequate oversight of a key risk area (food safety).

Dairy processors and their board members should take note of this court case.

In particular, these points were made; “the complaint fairly alleges that before the listeria outbreak engulfed the company:
—no board committee that addressed food safety existed;
—no regular process or protocols that required management to keep the board apprised of food safety compliance practices, risks, or reports existed;
—no schedule for the board to consider on a regular basis, such as quarterly or biannually, any key food safety risks existed;”

According to Jeanne Flanagan, director of management liability at M3 Insurance, a board member should take care to understand more than just their fiduciary responsibility.

“It is important that board members inquire about the insurance coverages that are in place to protect their personal assets against claims made against them in their board position,” Jeanne said.

Because leadership can be held personally accountable for claims, the only liability coverage that provides protection for that exposure is Directors and Officers Liability Insurance.

This coverage is the financial backstop used to provide protection to the directors and officers when indemnification by the corporation is not available. The coverage essentially has three parts:
“Side A” - Protects the directors and officers when the organization is unable to indemnify those leaders for acts on behalf of the organization;
“Side B” – Reimburses the corporation when it is able to indemnify the directors and officers for their activities; and
“Side C” – Solely protects the corporation for wrongful acts attributed to the organization, not the directors and officers.

The bottom line is that D&O insurance is designed to protect the personal assets of the directors and officers of a company. The coverage is complex with many nuances to how the D&O coverage is constructed, and no two policies are the same. Food and agribusiness directors and officers must realize that, with D&O lawsuits on the rise, risks are inherent in leadership. All organizations – whether private, public or non-profit – can be exposed to claims of financial injury from the stakeholders. All can benefit from this type of coverage.

For those individuals considering a board position with a dairy processor – remember to mind your P’s & Q’s and ask about protection for the D’s & O’s


Jen Pino-Gallagher is director of the food and agribusiness practice at M3 Insurance. M3 Insurance offers insight, advice and strategies to help clients manage risk, purchase insurance and provide employee benefits. The views expressed above do not necessarily reflect those of Cheese Reporter. You can contact the columnist by calling (800) 272-2443, or by visiting


For more information, call (800) 272-2443 or visit


Jen Pino-Gallagher

Jen Pino-Gallagher is a Director of Food & Agribusiness Practice at M3 Insurance. M3 Insurance offers insight, advice and strategies to help clients manage risk, purchase insurance and provide employee benefits.
For more information, call (800) 272-2443 , visit

Recent M3 Insurance Columns

Recovering From An Insurance Non-Renewal
March 1, 2019

Food Safety: Whose Job Is It? 5 Ways Human Resources Influences Food Safety
October 5, 2018

Well, That's Cheesey! how Cheese Names Have Gone From Quaint to Contentious
April 13, 2018

Three Steps to Managing The Risks In Dairy Plant Expansions
by Jen Pino-Gallagher
March 2, 2018

When Acquiring A Company, No One Likes To Hear "Surprise"
by Jen Pino-Gallagher
January 19, 2018

When Sales Go Global: Minimizing Complexity-Maximizing Control
by Jen Pino-Gallagher
August 11, 2017

A Tool For Improving Your
Insurance Coverage
by Jen Pino-Gallagher
July 8, 2017

Food Grade Product Liability Insurance for Your Food-Grade Products
by Jim Brunker

June 9, 2017


What do you think about 
Jen Pino-Gallagher's Comments?*

Please tell us if you are a
Dairy product manufacturer 
Dairy marketer /importer/exporter
Milk producer
Supplier to manufacturer