Directors and Officers Liability Insurance (often called D&O) is liability insurance payable to the directors and officers of a company, or to the organization(s) itself, as indemnifications for certain damages (losses) or advancement of defense costs in the event any such insured suffers such a loss as a result of a legal action (whether criminal, civil, or administrative) brought for alleged wrongful acts in their capacity as directors and officers (as to the individual directors/officers) or against the organization(s) (either for securities claims or – if publicly traded company or larger private company – other actions against the organizations themselves). Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously. It has become closely associated with broader management liability insurance, which covers liabilities of the corporation as well as the personal liabilities for the directors and officers of the corporation.
Directors & Officers Liability
- Travel Insurances
- Commercial Automobile
- Volunteer Coverage
- Garage Keepers
- Employment Practices Liability
- Pollution
- Directors & Officers Liability
- ERISA Bond
- Crime
- Cyber Liability
- Workers Compensation
- Commercial Umbrella
- Inland Marine
- Professional Liability
- Builders Risk
- Property
- Bond
- Amateur Sports / Health & Fitness
- General Liability
Directors & Officers Liability
Insuring Clause 1 provides coverage to individual directors and officers when not indemnified by the corporation (as a result of state law or financial capability of the corporation – note, however, that it may not cover situations in which a corporation simply refuses to pay the legal defense/loss of a director or officer, or if a bankruptcy court issues an order preventing such indemnification by the corporation/insurance carrier – for such situations.
Insuring Clause 2 provides coverage for the corporation (organizations) when it indemnifies the directors and officers (corporate reimbursement) Side – C.
Insuring Clause 3 provides coverage to the corporation (organizations) itself for securities claims brought against it.
NOTE: Securities claims only coverage applies to publicly traded companies and large private companies; small private companies may be able to obtain broader “entity” coverage.
FAQ'S
What is Directors and Officers Liability Insurance?
D&O Liability is an indemnification (reimbursement) for losses or advancement of defense costs in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers.
How can I obtain D&O coverage for my organization?
The documents required are carrier specific applications, financial records of the organization, a list of your directors and officers as well as copies of your Articles of Incorporation.
What is the cost of D&O coverage?
The premium cost is dependent upon your financial strength of the organization, your type of industry and your claim loss history.
What are the benefits?
D&O Liability protects the organization’s directors and officers from becoming personally liable for activities related to their business decisions.
How much coverage do I need?
The limit of the coverage depends on the business exposure and the history of litigation in the industry. It is generally a decision made by the board of directors to determine a comfortable level of protection.
What do I need to implement coverage?
A carrier approved quote, financial records, and a premium check. Some carriers may require additional documentation.
