D&O insurance policies provide liability cover for Business Directors, senior managers to protect them against claims which may occur due to the decisions and tasks undertaken within the scope of their duties. Most companies get D&O cover because to err is human and managers may make mistakes.
With high risks involved, D&O insurance has now become a regular part of risk management in companies. D&O insurance covers financial protection for managers against the results of alleged or actual “wrongful acts”. Sometimes some management decisions may have adverse consequences, D&O insurance helps protect the company by covering claims resulting from such consequences.
One important thing to keep in mind is that D&O insurance policy does not cover fraudulent, criminal, or intentional acts of non-compliance or incidents where directors took illegal remuneration or worked for personal gains.
Directors and officers may be sued for several reasons related to their roles in the company, including:
- Breach of legal duties leading to financial losses or bankruptcy
- Misrepresenting the company assets
- Misuse of Business funds
- Fraud
- Failure to comply with workplace laws
- Theft of property, physical or intellectual
- Poaching of competitor’s customer
- Lack of corporate governance
Does Your Business Need D&O Coverage?
It’s a typical thought that D&O claims are largely a public company phenomenon. A recent survey by Towers Watson showed that public, private, and non-profit companies all face D&O litigation risks. Businesses with a corporate board or advisory committee ought to think about securing themselves with D&O insurance, same goes for non-profit organizations.
Your company doesn't have to have revenues running in tens of millions of dollars for your directors and officers to be sued for management or mismanagement of company affairs.
To know how much is enough and does your company needs directors & Officers Liability Insurance, Get in touch with EZ Online Service.
Let EZ Online Services help you choose a policy that will fit your individual needs. Protecting your assets, whether personal, business, or both, is our goal. A well-chosen policy can lessen the impact of some of life’s most common, yet unforeseen perils.
