Las Vegas Directors and Officers Liability Insurance
When our brokers sit down with individual companies to discuss Las Vegas/Clark County, NV Directors & Officers Liability Insurance Coverage, we are referring to a specific type of professional liability policy whose main objective is providing protection for present, past, and future company directors and officers of for-profit companies, nonprofit companies, educational institutions, and privately held firms from potential damages resulting from actions of alleged or actual wrongful acts the organization’s directors and officers may have committed in their positions with the organization.
This type of professional liability policy will provide protection in the event of an actual or alleged wrongful act, breach of duty, misleading statement given, or omission by your board of directors and officers. These types of professional liability policies, in effect, serve as a management errors and omissions liability insurance which will cover a claim from managerial decisions which have severe financial consequences affecting the company. When your Las Vegas/Clark County, NV business selects its board of directors, it would be a wise investment decision to acquire Las Vegas Directors & Officers Liability Insurance Coverage. Also, if your company has investors, more than likely, one condition that will almost automatically be required to receive any kind of funding will be a stipulation that your business purchase a Directors & Officers Liability Policy, because, as we know, directors and officers can become the target of a lawsuit from shareholders, employees, vendors, customers, or regulatory agencies.
Many times, clients confuse Directors & Officers Liability Insurance with Errors & Omissions Liability Insurance, and our brokers can assist the clients to better understand that these two types of professional liability insurance coverages are totally different insurance coverages.
With a Las Vegas/Clark County, NV Errors & Omission Coverage, the policy is concerned with negligence, performance, and failures with respect to your company’s services and products, not with the duties and performance of your company’s management team. Some examples of companies that carry this type of coverage are accountants, business consultants, and insurance brokers.
In working with clients, our brokers highly recommend that it makes good business sense to carry both Las Vegas/Clark County, NV Directors & Officers Liability Insurance and Las Vegas/Clark County, NV Errors & Omissions Liability Insurance, where needed. It is very imperative for any company that has officers responsible to its board and/or its investors to carry a Las Vegas/Clark County, NV Directors & Officers Liability Insurance Policy, especially if any possibility exists that a lawsuit may be able to breach the company veil and pierce its executives’ personal assets. It is widely expected that all the directors and officers of any corporation have a firm obligation of acting in the best interests of the company and its customers. Think about how much exposure and risk your company would have by the wrongful actions of one of their officers making a side bet against the company? In acquiring this type of professional liability insurance coverage, it can mitigate this sort of risk.
In effect, these professional liability insurance policies function as “management errors and omissions liability insurance,” covering claims resulting from managerial decisions that have serious financial consequences for your business. In some instances, insurance carriers are able to include shared or separate limits of Nevada Employment Practices Liability Insurance (workplace harassment, discrimination, wrongful termination, etc.) on Directors & Officers Liability policies for private companies. These particular types of professional liability policies have provisions in the policy that call for shrinking limits, which means that defense costs, which are, more times than not, a major cost of the claim, are included in the policy limits and will reduce the policy limits.
This approach contrasts with most commercial general liability policies in which defense costs are covered in addition to the policy limits. Some other unique features of Las Vegas/Clark County, NV Directors & Officers Liability policies are they:
- Are written on a claims-made basis with a retro date
- May contain no explicit duty to defend the insureds (when covering for-profit businesses)
- Cover monetary damages but exclude bodily injury (BI) and property damage (PD)
The brokers at PJO Insurance Brokerage in Nevada look forward to working with your Las Vegas/Clark County, NV company to discuss how a Directors & Officers Liability Insurance Policy would best serve your company.