A Guide to D&O Insurance.
Directors & Officers Liability Insurance, commonly known as D&O can be confusing. It’s a very different type of policy than most business leaders are familiar with and that’s why we are providing A Guide to D&O Insurance here. The policy itself is written on a “Claims-Made” policy form, which is a bit confusing, the insuring agreements are different than most other liability policies, and to make it even more confusing, many insurance brokers aren’t familiar enough with it to fully explain it or make it understandable.
Why is D&O insurance a critical coverage for most businesses to carry?
Because D&O protects a firm’s decision-makers and their personal net worth from depletion.
What do I mean by that? Here’s the answer. Your firm’s leaders; owners, managers, officers and directors can be sued personally for potential wrongful acts they commit while discharging their duties as company leaders. Now you may be asking: Doesn’t the corporate shield protect them from claims like these?
They can, but there are some fundamental problems with that thinking. The first is that D&O-related claims are expensive to defend against and more expensive to settle. Most private firms just won’t have the capital necessary to protect company leadership if they are sued, regardless of what a company’s by-laws or charter say their obligation is. That means decision makers need to dig into their own personal assets to protect themselves which can lead to depletion in a serious lawsuit.
For those reasons, we’re pleased to publish this extensive guide on the subject of D&O Insurance.
If I can be of assistance in helping you with understanding D&O insurance or making a D&O purchasing decision, please contact me by phone or email, or click the button below to get started.
My goal is to be as informative as possible so you make the best decision possible when it comes to D&O Insurance. We represent and have access to just about all insurers writing D&O insurance for all types of firms, from small private startups to public companies. We have a heavy emphasis on financial service firms such as hedge funds, private equity and venture capital.