What is Directors and Officers liability insurance and why is it needed?
“Directors and Officers’ liability insurance (D&O insurance) is designed to protect the company’s board members and officers from claims made against them alleging that they have acted wrongfully in carrying out their duties to that entity, to third parties, to employees or to the government. It is also designed to insure the hospital itself for its obligation to provide indemnity for such claims. Indemnification means the hospital will take responsibility for any claims that name the board members and will pay for lawyers to defend against those claims” (Trustee Magazine June 2009). D&O provides coverage for intentional actions taken by an organization’s board of directors or managers. Hospitals usually cover negligent acts that harm someone. For example, if a board member of the hospital negligently causes someone “bodily injury, personal injury or property damage” from failing to do what a reasonable person would do in that situation, the general liability coverage would come into p
