DIRECTORS AND OFFICERS INSURANCE
What is Directors and Officers Insurance?
Directors & officers insurance (D&O) protects directors and managers from lawsuits arising from alleged wrongful acts. The policy is crucial to protect the high-level management roles.
Wrongful acts include accidental breach of trust, breach of duty, errors, misleading statements and wrongful trading. The policy will only cover directors and managers, not employees, but will cover lawsuits brought by employees against managers.
With D&O insurance, directors and officers can avoid financial loss, company shutdowns and unwanted negative reputations.
What Does Directors and Officers Insurance Cover?
Directors and officers insurance can cover:
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Defence costs and legal representation expenses
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Settlements and bail bond costs
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Public relations expenses
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Cost arising from extradition proceedings
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Tax contribution in case of insolvency of the company, while one or more of the insured have personal liability.
Directors and Officers Insurance Tips
Even if the claim is irrelevant and built without solid arguments, you would face defence costs that strongly affect your cash flow. Therefore, a lawsuit involving a manager can be devastating for any company, making director and officer insurance vital for all.