Directors and Officers Liability Insurance.
Directors and Officers can be targets for lawsuits relating to founded and unfounded wrongful acts such as omissions, improper conduct, misleading statements, breach of duty, and more. This can compromise the reputation of your business and result in financial losses. Important staff members can also be personally sued by investors, employees, and other third parties. Directors and Officers Liability Insurance covers legal fees, settlements, and can extend to protect the company if it is named in a lawsuit.
- Loss of documents
- Intellectual property
- Claims against the insured
- Mismanagement of operations or company assets
- Acts beyond authority granted in by-law
- Libel and slander
- Joint venture liability
- Breach of confidentiality
- Violation of certain state and federal laws
- Self-dealing and conflicts of interest
8 Reasons for Directors and Officers Liability Insurance.
Umbrella policies often do not cover claims involving directors and officers.
Investors want it.
If you want to raise funds from investors, then they will require that you have Directors and Officers Liability Insurance to protect their personal assets from lawsuits relating to their actions and relationship with your company.
Directors and Officers Liability Insurance protects your key leaders from lawsuits relating to founded and unfounded wrongful acts such as omissions, improper conduct, misleading statements, and breach of duty.
Not every business succeeds and in the event of failure or a large financial loss, investors may take legal action against a company’s top executives.
The founders of a private company can protect themselves with Directors and Officers Liability Insurance when shareholders and investors file lawsuits claiming that the sale price of shares was not adequate.
Employment Practice Lawsuits.
In a small to medium sized business, many Directors and Officers are actively interacting with staff, and this makes them easy targets for claims relating to sexual harassment, discrimination, and wrongful termination. Directors and Officers combined with Employment Practice Liability insurance is a smart investment to protect against these types of claims.
Legal Compliance Errors.
Small to medium sized companies may not have the staff or resources to review and maintain proper legal compliance, which makes them susceptible to legal compliance lawsuits from government agencies.
It does not matter if the claim is founded or unfounded, the result will always be costly to defend. Directors and Officers Liability Insurance will cover the legal expenses even if the lawsuit is unfounded.