Directos and officers (D & O) have a responsibility to manage the company in the best interest of stockholders, investors and employees. Company affairs such as the use of property and assets, are a part of their obligations. Therefore they are held liable for losses that result from their neglect or poor decision making.

So what do you do when a lawsuit is filed against your board of directors? If you don’t have directors and officers insurance, you’re probably in for some hefty financial loss. With a D & O policy, legal fees will be covered, but there are more reasons as to why having directors and officers insurance is important for your organization. Here are four reasons why it is vital for your company to have this type of coverage:

    1. You Need Investors-

    Potential investors will want proof of Directors and Officers liability insurance before they make investments into your company.

    2. You Have Employees-

    Having employees puts you at risk for employment practices lawsuits, which includes harassment, discrimination, and wrongful termination. A D & O policy can include this coverage.

    3. Your General Liability Is Not Sufficient-

    Small businesses may believe that their general liability insurance or umbrella policy covers them, but these policies actually do not include management liability claims.

    4. You’re A Target-

    Businesses of many different sizes can have officers or directors. Just because you have a small business, does not mean you are exempt from being the target of a claim against management.

Regardless of the size of your company, small or large, directors and officers insurance is an important aspect of a complete insurance policy. Whether you are a large corporation, a financial institution, or a non-profit or charitable association, a D & O policy can really protect you in tough times. To learn more about comprehensive coverage for your organization, contact us today!


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