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