Directors and Officers Coverage
The world is becoming increasingly litigious – now, more than ever directors and officers are being sued for the decisions and actions that they make, or fail to make while performing their managerial duties. Directors and officers insurance can fill this gap of insurance coverage, and provide peace of mind against this increasing trend.
What is Directors and Officers Insurance?
Think the personal assets of your directors and officers are untouchable in the event of a D&O liability claim? Well, think again.
D&O insurance protects the assets of a company’s directors and officers when they are sued for actual or alleged wrongdoings while performing their managerial duties. This insurance can also protect the company by covering costs such as expensive legal fees, and awarded settlements associated with these lawsuits.
Who Needs Directors and Officers Insurance?
The better question to ask is who doesn’t? A common misconception is that directors and officers insurance is coverage required for publicly traded companies only, but that is not the case. Whether your company is public, private, or non-profit – the decisions made, or not made by directors and officers are increasingly resulting in lawsuits.
Directors and officers insurance can help defend against these lawsuits and protect your organization’s assets, and the personal assets of its directors and officers
Who Brings Claims Against Directors and Officers?
When stakeholders feel that they have been wronged by the decisions made by an organization’s directors and officers, they may bring a directors and officers claim against them. These people can include:
- Regulatory Bodies
What are some common claims brought against directors and officers?
Some common reasons for D&O insurance claims include:
- Wrongful Termination
- Breach of contract
- Contract disputes
- Misappropriation of funds
- Breach of Fiduciary Duty
- Copyright and/ or patent infringement
- Poor employment conditions
- Conflicts of interest
Frequently Asked Questions About D&O Insurance
How much directors and officers insurance do I need?
Why do non-profit organizations need directors and officers insurance?
What are some directors & officers insurance claims examples?
Here are some real world examples of situations that may cause a D&O claim to
- A high ranking employee, left his organization to start a company of their own. They soon start selling a similar product and take a large share of the market from their former employee. This results in a lawsuit for theft of intellectual property and client lists.
- An arcade was sold to a new buyer. After the sale the directors and officers were sued by the new buyer claiming that the profitability of the
business was exaggerated to lock in the sale.
- A senior level employee has been accused of harassment by multiple employees and after an investigation his employment was terminated.
The employee sued the organization and its directors and officers claiming wrongful termination.