Directors & Officers Liability (D&O)

Directors and Officers Liability Insurance

Directors & Officers (D&O) Liability insurance covers awards and settlements resulting from allegations and lawsuits against an organization’s board of directors and/or officers. These claims are becoming more common, and directors and officers could be personally liable. Having a D&O Liability policy in place provides protection and attracts and retains qualified executives and board members.

Any organization, be it public, private, or nonprofit is vulnerable to multiple D&O exposures. Securities litigation, regulatory actions, and allegations of misrepresentation and breaches of fiduciary duties are just a few possible risks.

Top Five Reasons for D&O Coverage

1. D&O claims are becoming more common for private companies, public companies and nonprofits.
2. D&O liability claims related to regulatory actions comprised 23 percent of claims in 2012.
3. Personnel, such as directors and officers are increasingly found personally liable for claims. Personal liability coverage is one of the most important aspects of a D&O program.
4. Directors and officers want assurances beyond corporate reimbursement in the event their company becomes bankrupt or insolvent.
5. Directors, officers, and their organizations are vulnerable to a wide range of claimants. These include shareholders, competitors, customers, employees and government entities.

A D&O policy can cover defense costs, settlements, and judgments associated with claims. The policy provides protection for company assets and the personal assets of directors and officers. The policy also covers the personal assets of a director or officer’s spouse, domestic partner or a deceased director or officer’s estate.