Director/Officer Liability

Director/Officer Liability 2011-10-21T13:33:12+00:00

Directors and Officers Liability provides coverage for the fiduciary duties of directors and officers while acting in their capacity as a director or an officer.

Companies are exposed to many claims that prove costly and could expose the personal assets of their board. Companies who have D&O coverage will:

  • Protect the personal assets of the company’s directors and officers
  • Protect the company’s assets
  • Help the company monitor and provide defense costs associated with responding to lawsuits and investigations.

D&O Claims can arise from shareholders, investors, and partners in the company; customers, clients, and consumer groups; and from other third parties, including competitors. Some examples of D&O claims are:

  • A company hires a top executive, who is employed by a competitor company. The competitor company sues the company for damages suffered as a result of losing their top executive.
  • The directors and officers of a small private company appoint an employee as president of the company. Under this employee’s leadership, the company’s financial position weakens, leading to lawsuits by shareholders against the board of directors. The lawsuits allege the directors used poor judgment and did not act in the best
    interest of the company.
  • A technology company received a complaint from an investor who alleges the company improperly induced the plaintiff to issue a note payable to the company. The plaintiff specifically alleges the company made false representations and other false statements regarding the company’s forecasted rate of growth and failure to disclose its tax lien. The company defaulted on the promissory note when it failed to make the required principle and interest payments. The plaintiffs issued a demand letter and filed suit against the company.

Please contact INSUREtrust for assistance with your particular D&O Liability needs and questions.