Directors and officers hold one of the riskier positions in the company. They are often faced with complex and challenging decisions which can have huge impacts on the company and those that work for it. Sometimes the actions they take inevitably leads to financial loss for the business and third parties. For this reason, there is directors’ and officers’ liability (D&O) to help protect directors and officers.
Whether it is for a public, private, profit or non-profit company, D&O provides coverage for the past, present and future corporate directors and officers. It protects against personal losses, damages and defense costs if they are sued for actual or alleged “wrongful” actions done while they were with the company. For instance, this may include failure to maintain company records and reports, company financial losses, wrongful dismissal and employee discrimination. The company itself can also be reimbursed while defending the director or officer in question.
Once again, exclusions apply to the coverage. D&O does not cover claims against intentional illegal acts, criminal exploitation, dishonest actions, libel, slander, and bodily injury or property damage.
D&O is generally purchased by the company to cover a group of individuals rather than an individual director or officer. Like EBL, D&O is also a claims-made coverage, normally featuring a retroactive period that is agreed upon with the insurer.
We hope to have offered further insight on the many forms of business insurance available in the market. As the business landscape continues to change with societal advancements, new regulations and the people that govern it, it is important for companies to protect themselves and their reputation by investing in the right protection for their employers, employees, directors and officers. Let us at Pacific Insurance Broker Inc. help you find the security your company needs.