When Elon Musk made an offer to buy Twitter at $54.20 a share, he did more than put a price tag on the social media company of $43 billion. He also prompted Twitter’s Board of Directors to begin a reactionary campaign to prevent Elon’s acquisition of the company using a “poison pill,” or a technique that would create more shares, thus making the company more expensive to purchase. Twitter’s shares are currently valued at around $39, but they’ve been as high as $70 a share.

This means Twitter’s Board of Directors could be facing a huge shift from its normal fiduciary oversight role into a role that is focused on serving the highest bidder. This switch is guided in part by the Revlon rule, the legal principle stating that a “company’s board of directors shall make a reasonable effort to obtain the highest value for a company, when a hostile takeover is imminent.”

If the Board of Directors meets and is convinced that moving forward with Elon’s offer of $54.20 a share is not in the best interest of the company, existing Twitter shareholders–including its largest shareholder, Elon Musk–could file suit against the Board members on the claim that the Board did not do its due diligence in obtaining the highest possible. If successful, the award could be in the billions of dollars due to shareholders.

With billions of dollars on the line either way, Twitter’s Board of Directors is in a risky position. It is possible that these Board members could be liable for those funds in an amount above the limits of their insurance coverage as a Board member.

This risk–and the possibility that individual Board members are sued due to their actions on the Board–can be mitigated when covered with the proper Directors and Officers insurance. This “D&O” insurance is not necessary in every business, but a team like RiskVersity’s the risk management from the very beginning. With RiskVersity’s risk-management process, risks like those facing Twitter and its Board of Directors can be identified and planned for, with contingency plans for when to embrace a risk and when to avoid it. Without these plans, some companies wander into risky situations that push them beyond the scope of their risk-management team’s capacity–or the company’s own budget to manage these situations.

Curious about your own company’s need for D&O insurance? Contact RiskVersity today to get the conversation started.