Directors & Officers (D&O)

If you are the owner of a company, you have worked very hard to build something that provides you with personal satisfaction, success, and most importantly financial security for your family’s future. Tillinghast-Towers Perrin reported that the cost of defending D&O litigation can range from $100,000 to $2,000,000. Can your business and your future afford that expense?

D&O protects directors and officers of public, private, and not-for-profit corporations against loss (damages and defense costs) arising out of their status or conduct as directors or officers.

Common Claims Allege:

Breach of duty
Security law violations
Unfair competition

FAQ

My company isn’t publicly traded, why would I need a D&O policy?

Many private companies think that D&O exposure is only related to companies with publicly traded stock. Shareholders are not the only potential plaintiffs. A private company can also be sued by employees, investors, customers, competitors, vendors, suppliers, and/or creditors.

It’s my company, on what grounds could someone sue me for how I run it?

The leaders of any organization, even private companies, can face personal liability for the decisions they make. They can be sued based on their actions while running the company, or they can be named in a lawsuit simply because they are directors and officers.

Will a D&O policy pay for my defense if I’m sued?

A D&O policy will insure directors and officers for non-indemnified loss. In the absence of such coverage, if the company is unable to pay the defense costs associated with a D&O claim, the directors and officers may have to pay with their own funds, jeopardizing their net worth, just to prove their innocence.

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