Directors and officers liability insurance provides financial protection for the directors and officers of your company in the event they are sued in conjunction with the performance of their duties as they relate to the company. Think of directors and officers insurance as a management errors and omissions policy.
Directors and officers insurance is often confused with errors & omissions liability. The two are not synonymous; errors & omissions is concerned with performance failures and negligence with respect to your products and services, not the performance and duties of management. Generally, it is a good idea to carry both directors and officers liability insurance and errors and omissions liability insurance.
E&O insurance provides protection for any representative of your business, and the business itself, while directors and officers (D&O) insurance is primarily designed to protect the directors and officers of the company. D&O insurance covers mainly decisions made by management.
Also known as management liability insurance, D&O insurance is designed to protect the executive management team of a company from allegations concerning their management decisions. It applies to decision-makers of a business and protects them from personal liability in the event of a claim. Types of claims covered by directors and officers liability insurance may include:
Unfair business practices
Conflicts of interest
Mismanagement of funds
Release of non-public information
Directors and officers liability insurance can help protect the personal assets of the directors and officers of your company, as well as their spouses. This coverage kicks in when directors and/or officers are personally sued for alleged or actual wrongful acts in managing a company. It may apply to suits filed by:
D&O insurance usually protects the company as well. It covers legal fees, settlements, and other costs in the event of a lawsuit. It provides the financial backing for the standard indemnification provision holding officers and directors harmless for losses due to the role they play in the company.
Depending on your business, you may need the protection of both errors and omissions liability insurance and directors and officers liability insurance. Our experienced agent can review your coverage needs with you and help get you the best available quote.
BlackFire Cyber Insurance offers free, comparative quotes on Directors and Officers Liability Insurance from multiple insurance carriers so you can get the best possible rate.
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