Directors & Officers Insurance is essential for covering claims that result from managerial decisions that had adverse outcomes. Protect your company today!
Directors and Officers Insurance is liability insurance that is payable to the directors and officers of a company, or the organization itself, for losses or defense costs. It covers you for claims made against members or officers that are part of a board of directors.
Generally, there are several areas in which D&O Insurance will most likely be applied:
- For-profit organizations
- Private firms
- Not-for-profit organizations
- Educational institutions
Directors and officers are also exposed to possible legal actions:
- By creditors
- Involving civl actions by competitors
- Allegations of violations of regulatory statue
- By the government in alleged price fixing and securities disclosure suits
- Shareholder actions involving takeovers, mergers and acquisitions.
Special Features of D & O Policies
There are several distinct features of Directors and Officers Insurance Policies:
- Generally, they are written purely on a claims-made basis
- They will cover monetary damages, but they do exclude bodily/property injuries
- In regards to “for-profit” organizations, there is usually no explicit duty to defend the insureds
Often, directors and officers insurance is confused with errors and omissions liability insurance (E & O). Remember, E & O coverage is concerned with performance failures and negligence of employees or company, whereas D & O coverage is concerned with the performance of management! Generally, it is a good idea to carry both types of coverage.