Directors and officers liability insurance, also called D&O liability insurance, helps you prepare for the possibility of being sued by an employee, vendors, competitors, investors, customers, or other parties. Below, the experts at Unity Insurance discuss what directors and officers liability insurance policies entail and why they are essential.
What Does Directors and Officers Liability Insurance Cover?
Directors and officers liability insurance protects the personal assets of corporate directors and officers, their spouses, and the company against claims of actual or alleged wrongful acts in managing a company. This includes legal fees, settlements, and other associated costs.
When Is the Best Time to Purchase Directors and Officers Liability Insurance?
Any business with a corporate board or advisory committee, including public, private, or nonprofits, should purchase directors and officers liability insurance as soon as they have an active board of directors or investors.
Is Directors and Officers Liability Insurance Essential?
The cost of seeing a legal complaint through can be costly and those who do not have the coverage can face lengthy, expensive legal battles— even if they have not committed any wrongdoings. Investing in directors and officers liability insurance not only provides corporate directors, officers, and their spouses with this essential coverage, but it also financial protection. Purchasing directors and officers liability insurance also ensures that you will have appropriate options for a lengthy legal battle if it is necessary. For this reason, directors and officers liability insurance is essential to avoid putting a strain on financial assets.
Qualifications for Directors and Officers Liability Insurance
When applying for directors and officers liability insurance, applicants will be asked which of the three types of coverage they need. Typically, smaller companies opt for what’s known as Side A and Side B. Side A covers directors and officers when the company is unable to reimburse them while Side B reimburses the company after it compensates a director/officer for loss. Larger corporations often elect all three coverages, including what’s known as Side C. This provides direct coverage of the business when both the business and its directors and officers are named in a securities lawsuit.
Any organization with a board of directors or advisory committee, including public, private, and nonprofits, is an ideal candidate for purchasing directors and officers liability insurance.
Speak to a Unity Insurance Agent Today About Directors and Officers Liability Insurance Options
Making decisions about your company or nonprofit can be difficult, and you may want to weigh your options. Directors and officers liability insurance can provide many benefits for you and your employees, including financial security and peace of mind about your future. Unity Insurance can offer competitive rates and excellent coverage. We stand ready to look into your specific situation and find the best coverage for you and your valuables. To speak to an agent today, contact us at (410) 539-6642.