Directors & Officers Liability Insurance
Directors and officers (D&O) liability insurance is designed to protect against lawsuits brought by shareholders and third parties. It not only safeguards company assets, but the personal properties of directors and officers.
Why D&O Insurance is Important
- Directors have legal responsibilities, including duty of care, loyalty and obedience.
- Corporate indemnification may not be available.
- The personal assets of individual board members are at stake in lawsuits.
- Outside directors often will not serve on a board without D&O coverage.
- Contemporary corporate scandals have heightened regulation on accounting practices.
- The Internal Revenue Service has increased its corporate scrutiny through audits.
- Bad business decisions and practices are visible for small companies.
- To protect against bankruptcy exposure.
- Judgments against an organization can have devastating impacts on operating budgets.
Common D&O Coverage Topics:
1: Ask about estate planning in the event of death or divorce.
2: Share real-world claim examples.
3: Outline the cost benefits of insurance versus the expense of a lengthy court case.
4: Discuss potential lawsuits and how the process would be paid for without insurance.
5: Determine the right combination of price and coverage.
6: Provide a number of different and reasonable coverage options.