As businesses grow and expand, so do their risks. Organizations need to protect not only their physical properties and investments but also the people who run the company. Directors and officers insurance allows you to do just that. Keep reading to learn more.
What is Directors and Officers Insurance?
Directors and Officers (D&O) insurance is coverage for the personal liability of executives and board members of businesses.
It provides protection against claims related to their decisions and actions, particularly if they breach (or are alleged to breach) their duties.
While coverage may vary depending on different factors, D&O insurance usually includes legal expenses and settlements awarded in lawsuits against directors and officers, up to the limits stated in your policy.
Why Do You Need D&O Insurance?
Aside from the obvious potential of lawsuits, D&O insurance can benefit businesses and their directors and officers in several ways. For example, it can protect the company’s reputation, especially after and during a major legal battle.
Without D&O coverage, directors and officers might need to use their personal assets to cover legal fees and settlements, which can be financially devastating.
D&O insurance helps your organization retain valuable directors and officers who may otherwise be reluctant to accept leadership roles, leading to recruitment and retention of talented executives.
What are the Types of Claims Covered by D&O Insurance?
Directors and officers can come under fire for various reasons. Some common examples include:
- Breach of obligations
- Failure to comply with regulations
- Wrongful termination
- Mismanagement
- Accounting fraud
- Among others
D&O Insurance policies cover some or all of these claims, making it easier to fight these allegations and prevent directors from having to use their personal assets in long-drawn legal battles thus ensuring the smooth operation of a business even when tough circumstances arise.
Who Needs D&O Insurance Coverage?
D&O Insurance coverage is an essential risk management tool for any business regardless of its size or industry.
Public companies typically require D&O insurance coverage to protect directors from potential lawsuits by shareholders.
However, private businesses equally need D&O insurance coverage to protect directors and owners who can be held liable in litigation. Nonprofit organizations, companies planning to go public, and firms with regulatory liability risks can also benefit from D&O insurance coverage.
Looking for Directors and Officers Insurance? Carter Bradley Insurance Solutions Can Help
At Carter Bradley, our team is solely focused on your unique needs to find the best prices and coverage you require for your business, home, auto and life insurance.
We are located in Corona, California. Contact us today by email at info@carterbradleyinsurance.com, by phone at (951) 547-4240, or through our social media accounts on Facebook, Twitter, and LinkedIn.
