There are many decisions that need to be made in order to have a successful organization. Directors and officers play a vital role in businesses making decisions that affect the interests of employees, stakeholders and clients. They’re expected to act in good faith and the best interest of the organization. As we all know, mistakes can happen which can lead directors and officers legally responsible. No matter the size of the organization or whether public or private, litigations can arise. Legal costs can be detrimental and if the risk is not covered, it can lead to top talent walking away from your firm for the fear of personal liability.
A D&O policy kicks in where a commercial general liability insurance policy ends. Coverage protects executives in the event of an alleged or actual wrongful act. Now more than ever, corporate scandals are extremely public and executives are the ones taking accountability. Without a D&O policy, personal assets of an executive are at risk if a lawsuit were to happen. Exclusions to this coverage include criminal or fraudulent activity or intentional wrongful acts solely performed for personal gain. This coverage is in place to cover the people that run organizations in the event that a mistake leads to negative consequences without being personally liable. Sources of D&O liability include employees, competitors, creditors, shareholders or government/regulatory authorities. For example, an employee that left the organization and had experienced discrimination and harassment is now taking legal actions in an effort to rectify their grievances.
No matter public or private or the industry you operate in, your business can benefit from a directors and officers policy. There is no standard insurance policy and your MIG broker can work with you to tailor coverages specifically to what you need.