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Directors and Officers Insurance
Whether you’re a business owner, corporate leader, or director of an organization, everyone wants to feel secure that a lapse in judgement or market instability won’t cause the collapse of their business or organization. Officers and directors insurance is a great option for both individuals and large corporations to help provide that sense of security and give them the space to help them take their company to the next level.
In the past, many people assumed only large corporations would use directors & officers insurance, but as our financial landscape evolves and grows, many smaller businesses and even individual entrepreneurs are seeing the value of investing in this type of insurance coverage. No matter how big or small your company is, it’s a good idea to learn more about director’s insurance and how it can benefit you and your organization. Keep scrolling to learn more about the basics of directors & officers insurance and director and officer insurance cost.
What is directors & officers insurance?
In essence, directors & officers insurance is supplemental coverage that is intended to protect individuals from financial liability in the event of negative or adverse business practices. Senior leadership teams in business are an important part of what makes those companies successful. These team members are held to a certain standard when handling business affairs known as a fiduciary duty. This means that they must act in the best interest of their company and their clients.
What does directors insurance cover?
Directors & officers insurance helps offset the cost of settlement payouts, defense, and strategies of defense unless the person is found guilty of a crime. For example, if a CEO of a large business decides to sue their previous employer for slander, wrongful termination, and the hindrance of further gainful employment after he or she is fired by the Board of Directors. The cost of investigating, defense, and court fees could seriously financially affect even a large company. By investing in directors & officers liability insurance, the Board of Directors and any associated officers will not be held personally responsible for the losses. As with any insurance product, directors & officers insurance can be tailored to meet a business’ specific needs. However, most directors & officers insurance cover the following:
Misuse of the Organization’s Funds
Mistreating an Employee
Failure to Perform Official Duties
In the United States, the majority of directors and officers filings are the result of lawsuits filed by former employees for wrongful termination. Be aware though that this type of insurance does have exceptions – especially in the cases of intent. If there is intentional or malicious illegal action taken (i.e. embezzlement, fraudulent activity, etc.) the policy will not provide coverage. Knowledge can also be considered an act of accountability, even if an individual or company didn’t actually participate in the illegal act.
Dunham Insurance Services is an independent agency offering the best insurance policies throughout Florida and the rest of the country. They are committed to delivering to their clients an insurance policy that is tailored to their unique insurance needs at a competitive price. Contact us today to get a free rate quote and discuss your specific insurance needs.