Directors and Officers Insurance is an essential coverage if you own or help manage a business. The reason is that Directors, Officers and other Corporate Executives and Decision-makers have increased responsibilities toward investors, members of the public and the company’s employees. 

Responsibility often goes hand in hand with increased risks. If something goes wrong and a Director or Officer is dragged into court, they are personally liable for the penalties according to the Law.

Directors and Officers Insurance (D&O) protects the owners, directors and managers of an organization against professional claims made against them. These claims might have to do with omissions or wrong management decisions made while running the business. In other cases, an employee injured at work can raise a compensation claim.

To further grow the list of potential threats and risks, stockholders, competitors, and regulatory authorities who believe that a Director hasn’t applied ‘due care’ while running the firm can sue the company and the person in charge.

Common claims entail financial mismanagement, violation of company law, health and safety issues or unfair employment practices.

If you or your firm has been accused of any claim like the ones we mentioned before, your D&O policy will step in. This insurance type settles your legal bills and compensates the aggrieved party if needed.

D&O insurance covers Directors and Officers in cases, such as:

• They encounter claims by investors or other stockholders.
• An employee injured on the job files a claim requesting compensation.
• They made an oversight in delivering a pension or employee benefit program. In this case, they have to deal with legal action from individual employees and financial regulators.
• They made a false statement about an industry rival and are facing legal action for defamation.