Our Analysis
Who needs Directors and Officers (D&O) Insurance?
- If you have a public, private, or non-profit company with a board, advisory committee, or executives, you have directors and officers litigation risk.
- If your business has employees or customers or works with vendors or government entities, your directors and officers have an exposure.
- Directors and officers may be sued for several reasons¹:
- Breach of fiduciary duty
- Misrepresentation of company assets
- Misuse of funds
- Fraud
- Failure to comply with workplace laws
- Theft of intellectual property
- Lack of corporate governance
- D&O Insurance helps protect the personal assets of people who are directors or officers of a company from losses if they are sued.
Our Actionable Advice
What does D&O Insurance Cover
- D&O Insurance covers several costs. However, coverage varies based on the policy type, exclusions, and limits. These costs may include:
- Legal fees
- Settlement costs
- Damages
- Personal assets
- Entity coverage
- Coverage options typically include:
- Side A: D&O Liability Coverage: Protects the personal financial losses of directors and officers.
- Side B: Corporate Reimbursement Coverage: Reimburses the organization for expenses they incur when defending directors and officers.
- Side C: Entity Coverage: If the organization is named in the lawsuit, this insures the company for claims made directly against the company.
- D&O Insurance can be purchased as a separate policy or bundled with other coverage like Employment Practices Liability (EPL) and Crime.
D&O Insurance is a critical component of your risk management strategy, which includes:
- Protecting the personal assets of directors and officers
- Attracting and retaining directors and officers
- Legal defense
- Protecting assets and financial stability
- Attracting potential investors
The Big Takeaway
The Whitlock Group has over 30 years of risk expertise and experience managing and mitigating directors and officers risk.
For comprehensive business insurance solutions or if you’re unsure whether your business is covered adequately, contact us today.
Greg Whitlock, President
678-906-2008 ext. 1200
Cell: 404-218-8706
¹ “Directors and Officers (D&O) Liability Insurance,” The Hartford