Company executives and board members are your primary decision makers and often in the line of fire when disputes or liability issues arise. They’re generally personally named in lawsuits for alleged wrongful acts because of the positions they hold. Without the proper protection their personal assets could be at risk.
Enter directors and officers (D&O) insurance. To ensure your organizational leaders are held harmless due to their company roles, D&O insurance will cover their damages and defense costs in the event of a wrongful acts claim. D&O insurance also provides much-needed protection for your company for matters not covered by general liability insurance that involve economic loss not related to bodily injury and property damage.
This protection is a safeguard for company assets and helps to attract and retain quality executives. The additional protection will assure your leaders that they can take strategic business risks in their position without risking significant personal liability. Providing D&O insurance can foster a culture of innovation, giving your business greater potential for success.
Who should purchase this coverage?
All companies, even those without a formal board of directors. While D&O insurance is important to protect directors and officers, it’s needed for the company as a whole.
What kinds of companies need D&O insurance?
D&O insurance is suitable for any type of organization; including public, private and non-profit organizations, regardless of whether a board of directors is in place. Executives in all types of companies are vulnerable to allegations that could be protected by D&O insurance. However, the extent of coverage may vary depending on whether the organization is public or privately held.
Does this protect executives if they make intentionally illegal decisions?
No, most D&O insurance does not cover intentionally illegal actions made by executives. It also does not cover fraud or illegal profits collected by the individuals. Instead, coverage is provided for what each policy considers as a “wrongful act,” which can include specified misstatements, acts or omissions.
Collectively, this coverage will set your company up for success, as it gives your leaders the freedom to make strategic business moves that could push your company ahead. Without it, your executives may be held back or fearful to implement progressive tactics that keep your organization competitive.
If you are interested in learning more or getting a quote for D&O insurance, call our Property and Casualty division at 913.951.2400.