DIRECTORS AND OFFICERS PROFESSIONAL LIABILITY INSURANCE

What is D&O insurance?

Directors and Officers (D&O) liability insurance provides financial protection for the directors and officers of a company in the event they are sued in conjunction with the performance of their company-related duties.  D&O insurance reimburses the corporation for covered losses in which the corporation has indemnified its directors and officers in addition to paying covered claims made directly against the directors and officers.

Why is D&O Insurance needed?

Whether your organization is a public or private entity, the directors and officers have certain duties to the corporation, its shareholders and third parties. This would include the fiduciary duties of diligence, loyalty and obedience, duties as an agent of the company and duties imposed by statute. Breach of these duties can expose both the individual directors and the company to lawsuits by investors, employees and others.  D&O insurance also protects individual directors and officers from suits resulting from the performance and duties of management.

EPLI Component

Over 50% of all D&O claims arise from employment practices suits.  These claims stem from state and federal employment and discrimination statutes. Many D&O policies offer an Employment Practices Liability Insurance component to provide protection for these claims. The limit is most always a part of and not in addition to the amount of coverage secured with the D&O policy.

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