Directors and Officers Insurance
Directors and Officers Insurance
Directors' and Officers' Insurance is commonly referred to as "D&O Insurance." The goal of D&O Insurance is to protect officers and directors of a corporation from liability in the event of a claim or lawsuit against them asserting wrongdoing in connection with the company's business.
Once you start to rely on others to run your business (board of directors and professional managers), D&O Insurance becomes desirable. D&O Insurance basically protects against liability claims from people who allege that in conducting the business of the corporation, the directors and officers breached a legal duty to them.
Essentially, D&O insurance can provide protection for claims that result from errors in judgment. Directors have potential liability for not adequately performing their obligations or failing to exercise reasonable business judgment.
D&O Insurance has gotten very expensive and insurers have cut back on the scope of the coverage. It is very important to get a good insurance broker for this type of insurance to assist you in getting the best price and the most coverage for your directors and officers.
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