Directors & Officers2018-01-08T11:48:48+00:00

Filling the Coverage Gap

Unlike a commercial general liability policy that provides coverage for claims arising from property damage and bodily injury, a directors & officers policy specifically provides coverage for a “wrongful act,” such as an actual or alleged error, omission, misleading statement, neglect or breach of duty.

Regardless of your company’s size, the legal cost to defend directors & officers is substantial, as are the potential personal penalties. Due to the personal liability risk—which is not covered under a personal insurance policy—protecting boardroom talent can be a challenge. To help ensure both your officers’ and company’s well-being, a directors’ and officers’ liability insurance (D&O) policy is part of a comprehensive risk financing strategy.

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Why do we need
directors & officers coverage?

In today’s business climate of corporate transparency and accountability, an organization’s officers and directors face a myriad of employment-related exposures. Sarbanes-Oxley regulatory mandates and shareholder activism means directors are more frequently at risk, translating to rising claims and escalating settlement costs.

In the wake of unprecedented corporate scandals in recent years, clearly the trend of corporate accountability applies to large corporations. But privately held companies, including nonprofits, are not exempt from litigation arising out of the management decisions of their boards. They, too, are at risk.

Frequently Asked Questions

A “fraud” exclusion is typically included in a D&O policy, which eliminates coverage for losses due to dishonest or fraudulent acts or omission, or willful violations of any statute, rule or law.

According to the Nonprofit Risk Management Center, nonprofit organizations often report some difficulty in affording the cost of D&O insurance. To minimize the annual premium, they recommend choosing only those policy provisions considered most critical. For example, a volunteer-run nonprofit without paid staff may skip employment practices coverage until it hires staff. If affording a lump sum premium is a concern, inquire about the availability of premium financing. To defray the cost of premiums, some nonprofit organizations consider charging board members a portion of the policy cost.

Statistics show that shareholders and employees are the most likely group to sue private companies. Other parties may bring suits, such as the corporation itself, competitors, creditors, regulatory bodies, etc.

To help ensure both your officers’ and the company’s well-being, a directors’ and officers’ liability insurance (D&O) policy is part of a comprehensive risk financing strategy.

We offer many other insurance products

Acumen Solutions Group offers additional types of insurance products to meet the needs of your business. We understand the insurance needs of specialized industries and build our programs to fit your individual situation.

Related Products

In addition to this protection, you may consider building a more comprehensive program including other insurance products for your business and assets.

general liability insurance policy

General Liability
Insurance

Coverage to protect from claims including; bodily injury, property damage, personal injury and other claims that can arise from business operations.

professional liability insurance policies

Professional Liability
Insurance

Protection for professional service-providers from the cost of defending a negligence claim, and any damages awarded in a civil lawsuit.

employment practices insurance policies

Employment
Practices

Coverage for risks due to employment-related lawsuits, including wrongful termination, discrimination and sexual harassment.

Cyber crime liability insurance

Cyber
Insurance

Insurance coverage for the risks associated with storing and managing digital consumer information, data security and data breaches.