As a director or officer of a company, you have a lot of responsibility on your shoulders. Not only for the business itself, but also you could be liable if something goes wrong, or even if someone perceives that something has gone wrong.
You could find yourself defending civil court claims, paying lawyers, and liable for any damages that may be awarded by a court. This could add up to millions of dollars, which could send even the most well off member of management into bankruptcy.
That is why a Directors and Officers (D&O) Liability Insurance policy is an essential part of a business insurance program.
What is a Directors and Officers Liability Policy?
A D&O Policy will protect a director or an officer, as well as any senior staff, against court and civil claims that are filed based on their actions and decisions in the capacity of their job. This can include civil court claims and costs, as well as defence costs if one of these people is facing criminal or regulatory charges.
Who Needs a D & O Policy?
Directors and Officers, as well as senior staff, who make decisions that can affect clients’ need to have insurance cover.
While no one wants to consider that a decision that they make could cause harm to someone, it can happen. Having that policy can shield your personal assets from being decimated, and it can keep your long-standing reputation from being destroyed.
What is covered by a D & O policy?
Some of the costs that are covered by a D & O Liability Policy include costs for investigation, pre-claim event costs, personal reputation protection expenses, defence costs, fines and penalties, asset and liberty protection costs, extended reporting period for retired directors, officers and for other insured persons.
All of these costs can add up to substantial amounts, which can quickly decimate a personal or even business financial account, or can cause your regular liability policy to quickly reach its maximum.
If you are a director, officer, or another member of senior management, you want to be sure that your company has D & O insurance for you and your colleagues.
When in doubt, talk to a qualified broker.