Directors and Officers Liability Insurance
Directors and Officers Liability, also known as D & O, is an important liability coverage for many Corporations. Directors and Officers of the company can still have exposure to personal lawsuits from their business activities. Directors and Officers liability insurance offers protection against lawsuits of this nature.
Business Insurance covers the business for lawsuits, but D & O liability insurance protects the personal assets of Directors and Officers by providing insurance coverage for lawsuits they are named in as well as covering costs and legal fees that the company incurs related to the lawsuit.
What’s Covered by D & O Liability Insurance
There are three Insuring Agreements for D & O Insurance.
Side A - This insuring agreement will cover Directors and Officers if the company cannot provide indemnification or will not provide indemnification.
Side B – This insuring agreement will provide coverage for companies that provide indemnification to their Directors and Officers.
Side C – This insuring agreement provides coverage for the Company, and is also known as Entity Coverage.
Some of the common lawsuits that a D & O policy will cover are:
· Shareholder suits (stock or company performance)
· Workplace Laws
· Fraud
· Regulatory Actions
· Intellectual Property Theft
· Fiduciary Duty breaches
· Misrepresentation of Assets
· Prospectus misrepresentation
· Misuse of Funds
Common exclusions include ERISA, Bodily Injury and Property Damage claims, intentional fraud, and personal profiting, lawsuits between Directors/Offices.
Any non-profit, for-profit, educational institution or privately held business should consider D & O insurance, as they do have exposure for lawsuits directed toward their Officers and Directors. Many companies think that if they are not a public company, this coverage is not necessary but that is not the case. D & O lawsuits are common for any business with a corporate board.
At Fixated Financial and Insurance Solutions, we have multiple options for your Directors and Officers Liability coverage. We recommend packaging it with EPLI and Crime coverage to ensure that you have no coverage gaps for your business. Our carriers tailor your coverage to meet to your company’s needs and exposures and you can explore a variety of limits and options to keep your company protected.