Directors and officers Insurance
Directors and Officers Insurance is a specialized liability insurance that protects the personal assets of corporate directors and officers in the event they are sued for alleged wrongful acts while managing a company.
Directors and Officers Insurance is a type of specialty liability insurance that shields corporate directors’ and officers’ personal assets from lawsuits alleging wrongdoing while they were in charge of a business.
Benefits of Directors and officers Insurance
Coverage Types
Side A Coverage: Protects individual directors and officers when the company cannot indemnify them (e.g., bankruptcy).
Side B Coverage: Reimburses the company when it indemnifies directors and officers.
Policy Limits
Policies come with specific coverage limits, defining the maximum amount the insurer will pay for claims. These limits can vary based on the organization’s size and risk profile.
Policy Structure
Understanding the differences between Side A, B, and C coverage is crucial to selecting the right policy.
Common Claims Covered
Breach of fiduciary duty
Misrepresentation of company performance
Employment practices (wrongful termination, discrimination)
Regulatory investigations and enforcement actions
Errors or omissions in the decision-making process
Exclusions
Policies may exclude coverage for criminal acts, fraud, and personal profiting from a corporate transaction, among others.
Claims History
Insurers may consider the company’s claims history and governance practices when determining premiums.