D&O Insurance (or Directors and Officers Insurance) is a type of liability insurance policy that covers directors and officers for claims made against them, as they serve in their official capacity. Coverage is for claims which may arise from managerial decisions that have had harmful consequences, such as those resulting from failure to comply with laws or regulations, misrepresentation or reporting errors. In short, it is basically liability insurance for management errors and omissions.
Other covered risks may result from employment or HR practices, mergers and acquisitions, insolvencies, or creditor claims, to name a few. Not many people would want to accept these as their personal financial risks when they're serving in a management position.
Although this coverage can provide financial protection against personal liability for managers, it can also cover reimbursement to the insured company for any claims they pay to third parties for the protection of their managers. However, D&O liability insurance commonly excludes coverage in cases of fraud, property damage, or intentional non-compliant acts.
D&O liability insurance can provide valuable protection for the directors and officers of:
- Privately-held firms
- Not-for-profit organizations
- Educational institutions
- Homeowners Associations
- Condo Associations
Although policies may vary as to which individuals are covered, the policy limits and their exclusions, D&O liability insurance is generally considered a necessity to protect those who serve in leadership positions in businesses and organizations of all sizes.
If you would like to learn more about how a D&O liability insurance policy can help you protect your directors and officers from any financial liabilities associated with their managerial roles, Dunham Insurance can offer you trusted, expert advice.
We will be pleased to assist you with information about why you need it, and help you with choosing the right type of policy with a quality provider. At Dunham Insurance, we offer a wide-range of tailor-made policies. Please call 954-564-7772 or visit www.dunhamins.com to discover how we can help, and to receive your free quote.