Directors and Officers Insurance
Directors and Officers Liability Insurance provides financial protection for the directors and officers of your company in the event they are sued in conjunction with the performance of their duties as they relate to the company. Think of Directors and Officers Insurance as a management Errors and Omissions policy.
It is NOT Errors & Omissions:
Directors and Officers Insurance is often confused with Errors & Omissions Liability. The two are not synonymous; Errors & Omissions is concerned with performance failures and negligence with respect to your products and services, not the performance and duties of management. Generally it is a good idea to carry both Directors and Officers Liability Insurance and Errors and Omissions Liability Insurance.
Directors and officers insurance is important for any business enterprise that has its officers responsible to investors or perhaps a board, or if there’s a possibility a law suit is able to breach the business veil and hit executives directly, this insurance plan will be a safeguard against that scenario as well.
Officers of a corporation are assumed to have the obligation of acting in the best interests of the enterprise and its consumers. When an officer makes a side bet against his enterprise or possibly a customers assets, his deceitful actions expose the whole enterprise considerable risk. This plan will assure danger is mitigated and covered.
There’s also another aspect to this, that being sexual harassment or discrimination lawsuits, which have been levied against countless corporations in the past ten years. This type of claim can tie a company up in high-priced and time consuming litigation for years, which many organizations and businesses just can’t afford. Don’t let one bad action sink the entire ship – you are able to insure yourself from this lawsuit and save your organization.