Also referred to as “D&O,” Directors and Officers Insurance is payable to the directors and officers of a company, or to the organization(s) itself as reimbursement for certain losses or advancement for defense costs.
D&O insurance is helpful in the event an insured suffers a loss due to legal action for alleged wrongful acts with their powers as directors and officers.
For Profit and Non-Profit Organizations
At its core, D&O liability insurance protects the personal assets of corporate directors and officers, as well as their spouses, in the event that they’re sued by an employee, vendor, competitor, investor, customer, or another third party for alleged wrongful acts. If you hold a director or officer position and don’t have D&O insurance in place, now is the time to vet your options.
D&O Coverage Types
The typical D&O insurance policy for privately-held businesses will include three types of coverage:
A-side coverage protects directors, officers, and sometimes employees for defense costs, settlement fees, or judgements.
B-side coverage protects the company for directors’, officers’, and employees’ losses when the company does not indemnify them.
C-side coverage, or “entity coverage,” financially protects the corporation in its own right and may reduce insurance limits for directors and officers.
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