Directors & Officers Liability
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. 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 & Officers Liability Insurance can usually include Employment Practices Liability and sometimes Fiduciary Liability. The former involves harassment and discrimination suits, and is where the majority of your exposure will be.Your company needs Directors & Officers Insurance because claims from stockholders, employees, and clients will be made against the company, AND against the directors of the company. A director can be held personally responsible for acts of the company whether the company is for profit or non-profit. Employment practices suits constitute the single largest area of claim activity; Over 50% of all claims are filed under D&O policies.