TUESDAY, SEPTEMBER 10, 2013
What is Directors & Officers Insurance?
Directors & Officers Liability insurance provides financial protection for the directors and
officers of your company in the event they are sued in conjunction with the
performance of their duties as they relate to the company and or for Trustees of Master Condo Associations Insurance Policies. Think of Directors & Officers Liability as a management Errors and Omissions policy.
Directors & Officers Liability can usually include Employment Practices Liability
and sometimes Fiduciary Liability. The former involves harassment and discrimination
suits, and is where the majority of your exposure will be.
Directors & Officers Liability is often confused with Errors & Omissions Liability.
The two are not synonymous; Errors & Omissions is concerned with performance
failures and negligence with respect to your products and services, not
the performance and duties of management. Generally it is a good idea to
carry both policies.
When is Directors & Officers needed?
When you assemble a board of directors, they will frequently make the requirement.
Investors, especially Venture Capitalists, will also usually require that you show
evidence of Directors & Officers Liability insurance as part of the conditions of
funding your company.
Also having employees opens management up to employment practices lawsuits.
Why do I need Directors & Officers?
First, claims from stockholders, employees, and clients will be made against
the company, AND against the directors and or Trustee of the company and or Master Condo Insurance Associations. Since a director can be held personally responsible for acts of the company, most directors and officers will demand to be protected rather than put their personal assets at
stake.
Second, investors and members of your board of directors will not be willing to
risk their personal assets to serve as a corporate director or officer, no matter
how heartfelt their belief in your company.
Last, employment practices suits constitute the single largest area of claim activity
under D&O policies. Over 50% of D&O claims are employment practices
related.
Call or email us for a quote on your Condo Association Master Insurance Policy
(800) 550 - INSURE
www.savinjones.com
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