DIRECTORS & OFFICERS

did you know general liability or umbrella insurance policies do not cover claims or suits over mismanagement? you’re not alone- 65% of executives surveyed didn’t either.

A business without shareholders doesn’t guarantee a director or officer won’t be sued. Small to medium size businesses are just as vulnerable to financially devastating law suits as large, publicly traded companies.

 

COVERAGE INCLUSIONS

Directors and Officers insurance are “Claims Made” policies, not occurrence policies. This means insurance will indemnify the inolved parties regardless of when the error occurred.

D&O policies cover publicly traded, private, and non-profit organizations.

 

SIDE A COVERAGE

in the event that a Director or Officer is personally sued, and the corporation is not obligated or unable to indemnify the Director or Officer for all expenses involved in defending the suit, Side A coverage will indemnify the Director of Officer only.

what expenses does it cover?

damages to third parties

claims expenses – defense costs, accounting costs, investigation costs

judgements

settlements

SIDE B COVERAGE

in the event that a Director or Officer is personally sued, and the Corporation is obligated to indemnify the Director or Officer for all expenses involved in defending the suit, Side B coverage will indemnify the Business Entity.

study by Chubb Insurance

17% of executives of companies with revenues of less than $25million believe they will experience a D&O claim within the next year

the average D&O event costs $697,902

38% of D&O claims are employee related

SIDE C COVERAGE

In the event both the Directors and Officers AND the entity are sued, Side C coverage will cover all costs, fees, settlements, and fines for the defense. These suits usually are brought upon by shareholders. Some Side C policies will cover the entity in a securities claim even if members of the board are not named in the suit.

who is covered?

anyone on the Board of Directors

Directors of subsidiary companies

outside Directors

estates, heirs, and spouses

named employees

 WHO’S SUING DIRECTORS AND OFFICERS AND WHY?

 

shareholders

  • dividend declaration
  • executive compensation
  • financial performance/transactions
  • breach of fidu
  • accounting fraud
  • ciary duty
  • inadequate disclosure
  • inside trading
  • investment of loan decisions
  • loss or bankruptcy
  • merger/acquisition
  • stock offerings

 

employees

  • breach of contract
  • compensation disputes
  • defamation
  • discrimination
  • benefits
  • employment conditions
  • failure to hire/promote
  • harassment
  • whistleblowing
  • wrongful termination

 

competitors & government

  • copyright/trademark infringement
  • antitrust
  • civil rights
  • consumer protection
  • environment
  • taxes
  • securities
  • work conditions

 

clients/ customers

  • antitrust violations
  • contract disputes
  • debt collections
  • deceptive trade practices
  • fraud
  • refusal of credit

 QUICK QUOTE