There is an increased number of exposures that a company's officers and directors have to face when it comes to the recent need for accountability and transparency on a corporate level.
No matter the mission of your company or how large your organization is, there is a chance that legal costs that are associated with a lawsuit could be potentially crippling both your company, as well as your officers and your directors.
One mistake the companies what can make as a sending that Directors & Officers insurance is only necessary for companies that are publicly traded. However, even if you have a privately-held organization, there is a chance that you are officers, and directors can be held responsible in a lawsuit. That is why D&O Insurance is essential for your company.
Are you interested in learning more about directors and officers insurance and why your company needs it? We've created a quick guide to help you better understand. Keep reading to learn more!
What Is Directors and Officers Insurance?
Directors & Officers liability insurance is a type of coverage that protects individuals that fill a leadership role in a company from losing any personal assets if they are sued as a result of serving their role in an organization or business. D&O insurance also protects individuals from any costs, such as legal fees, if an organization is sued.
Benefits of Directors and Officers Insurance
There are many unique benefits of Directors & Officers Insurance. Some of the benefits that a privately held organization can expect to see include:
Peace of Mind
Claims for Directors & officers can come from government bodies, contractors, clients, and even employees. If you are a privately held company, it's prevalent for competitors and creditors to make claims. Investing in Directors & officers insurance will ensure that the company's leaders are protected, no matter what type of claim is made.
Reimbursement for Any Related Legal Costs
If there ever is a claim that is made, a director and officer's insurance policy will keep your company covered against any legal costs that arise, no matter what type of claim is made. Your insurance policy will provide reimbursement to any company leaders that hire legal help following claims made for financial mismanagement, any allegations of inappropriate or wrongful acts, negligence, or errors in judgment.
Investing in Directors & officers insurance is essential, especially since these types of lawsuits can often appear without any warning. Also, these types of lawsuits can easily reach unimaginable figures, keeping your leaders protected with the right insurance policy.
Understanding Why You Need a Directors and Officers Insurance Policy
Many privately-owned organizations don't believe they need to front the cost for Directors & Officers insurance policy. Even just one Directors & Officers claim can drain all of the assets that are personally held by each of the leaders in your company.
If you're interested in learning more about how your company and the leaders in your organization can be protected by Directors & Officers Insurance, feel free to contact us today.