What is Directors and Officers liability insurance?
D&O insurance covers a corporation’s directors and officers for some covered claims made against them. D&O insurance also reimburses the corporation for the cost of indemnifying officers and directors for covered claims. For an extra fee, the insurance will cover the corporation itself for a more limited group of covered claims. This coverage of the corporation’s liability is called entity coverage. The principal risk that D&O insurance is designed to cover is claims brought by a corporation’s shareholders, including securities fraud claims. Another risk to which D&O insurance is directed is the risk of employment-related lawsuits brought by employees against officers or directors for discrimination, harassment, and the like. If your company is concerned about employment practices liability, you should consider other insurance in addition to D&O insurance.
