How to Decipher Director and Officer Insurance

Director and Officer insurance is protection for the leaders of a company for when something goes wrong involving them. Some examples include wrongful acts, improper management, or errors in judgment. Many private companies aren’t familiar with this insurance.

 

A few things to keep in mind as D & O insurance becomes more prevalent in corporations:

To start, a lot of policies exclude cyber issues and antitrust problems but might make an exception upon request. Another interesting piece of information is that most D & O insurers won’t insure companies going public or they will tighten terms on these types of corporations. Finally, most companies will be very specific about what types of public relation items they will cover; most will only cover certain events and only up to a certain dollar amount.

 

Not a lot of private businesses understand the importance of Director and Officer insurance, but it is especially important for the higher ups of a company to understand the intricacies. All of these notes are important to understand when purchasing D & O insurance because it will allow the buyer to be more selective in seeking out exactly what is fitting. D & O insurance is very important to have; however, if the terms are not favorable, it can be like not having insurance altogether. Therefore, it is critical to read through a policy carefully before committing. 

 

All of the points mentioned previously are critical when determining what policy is fitting. It is also important to know exactly what coverage your company needs for its directors and officers. For example, a small manufacturing company with not a lot of contact with others likely won’t need a lot of public relations coverage. However, this company might need errors in judgement coverage as a lot of decisions about expanding the company might have to be made. A D & O policy all depends on the situation a company is in, but one thing is for sure. D & O insurance is extremely important and can help protect individual assets if anything ever goes wrong.