Directors & Officers Liability Insurance

Directors and Officers Liability Insurance, often referred to as 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 private - other actions against the organizations themselves). Such coverage can extend to defense costs arising out of criminal and regulatory investigations and trials as well; in fact, often civil and criminal actions are brought against directors  and 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.

Under the "traditional" D&O policy applied to "public companies" (those having securities trading under national securities exchanges etc.), there are three insuring clauses. These insuring clauses are termed: 

Insuring Clause 1 (Side-A or "non-indemnified"); 

Insuring Clause 2 (Side-B; or "indemnified"); 

Insuring Clause 3 (Side-C; "entity securities coverage"). Contemporary (competitive) 

D&O policies also provide for Insuring Clause 4 (Side-D), which provides for a sublimit for investigative costs coverage related to a shareholder derivative demand.

Directors and Officers Liability Insurance provides financial protection for the directors and officers of your company in the event they are sued in conjunction with the performance of their duties as they relate to the company. Think of Directors and Officers Insurance as a management Errors and Omissions policy.

Directors and Officers Insurance is often confused with Errors & Omissions Liability. The two are not synonymous; Errors & Omissions is concerned with performance failures and negligence with respect to your products and services, not the performance and duties of management. Generally it is a good idea to carry both Directors and Officers Liability Insurance and Errors and Omissions Liability Insurance.

When considering your needs for insurance products for your home or business consider contacting Bennett Insurance Group at 623-979-4140

Presented By:
Jim Bennett
Bennett Insurance Group
623-979-4140
http://jimbennettinsurance.com
jim@jimbennettinsurance.com