SPECIALTY INSURANCE SOLUTIONS
DIRECTORS’ & OFFICERS’ LIABILITY
WHAT IS IT?
Directors’ and Officers’ Liability Insurance (D&O) is insurance payable to the directors and officers of a company, or to the corporation itself, to cover damages or defence costs in the event they are sued for wrongful acts while they were with that company. Claimants often include shareholders, customers, regulators, and even competitors (for anti-trust or unfair trade practice allegations). Most potential directors or officers require that a company maintain a D&O policy before they will agree to serve on the board.
Coverage Benefits Our Directors’ and Officers’ Liability Insurance protects the directors of privately and publicly held corporations. Our extensive coverage also includes options to purchase both Employment Practices and Fiduciary Liability Insurance extensions. For Non-Profit risks, our D&O product has been designed to meet the unique needs of non-profit organizations. This policy extends coverage beyond that of the traditional D&O policy to include coverage for the non-profit’s trustees, employees, volunteers and the entity itself. We also provide an option to extend the policy to cover any professional liability exposures the non-profit entity may have.
- Directors’ and Officers’ Liability Insurance — Private and Public Corporations
- Excess Directors’ and Officers’ Liability Insurance
- Non-Profit Management and Corporate Liability Insurance
- Employment Practices Liability Insurance
- Fiduciary Liability Insurance
FIVE THINGS YOU SHOULD KNOW ABOUT D&O
1. Directors and officers are not protected by corporate status.
The members, volunteers, directors, and officers may still be liable even if the organization is legally incorporated. Directors and officers of a corporation are responsible for their own actions as well as those of the corporation. In some instances they are even responsible for the actions of other directors. The courts have assessed damages against directors of corporations for their wrongful actions and in some cases the laws impose specific legal responsibilities on these directors. It’s a hard truth. One that is best understood before a claim occurs.
2. Even organizations that try to do good can get hit with a D&O law-suit.
Charities and non-profit organizations may not have shareholders, but they do have other stakeholders. Potential plaintiffs include representatives of government agencies, donors, vendors, service recipients alleging injury from the non-profit’s actions or failure to act, or employees and volunteers.
3. Resigning from the board doesn’t protect you.
When directors or officers resign from a company when they find out there is a problem, they can still be sued. They have a duty to be diligent and oversee the operation of the organization. If they failed this duty, even by omission, they can still be held liable even after they have resigned.
4. Not all policies or insurers are equal.
At the time of a D&O claim, the last thing you want to learn is that your coverage isn’t as good as you thought it was. While coverage itself is important, and must cover all the exposures that are unique to your organization, don’t underestimate the amount of expertise required to properly identify your areas of exposure. Similarly, you want a company that can step up and guide your organization through the claims process, and always ensure that your insurer is financially stable and able to pay claims on your behalf.
5. Defending you is often the most difficult and expensive part of a D&O suit.
Your D&O policy typically includes the requirement to defend your organization against lawsuits. Your insurer steps in with their years of D&O experience and works on your behalf to settle, defend or dismiss the claim. For many organizations without proper D&O coverage, the cost to defend yourself against a suit can be permanently damaging — even if the suit against you settles in your favour.
- Private Company D&O – Application
- Private Company D&O – Renewal Application
- Private Company D&O Educational Institutions – Application
- Public Company D&O – Application
- Public Company D&O – Renewal Application
- Side A DIC Liability – Application
Supplemental Applications – Commercial
Applications – Non-Profit
- Non-Profit D&O – Application
- Non-Profit D&O – Renewal Application
- Side A DIC Liability – Application
Supplemental Applications – Non-Profit
Applications – Educational Institution
- Highlights – Non-Profit D&O
- Highlights – Private Company D&O
- Highlights – Private Company D&O for Educational Entities
- Highlights – Public Company D&O
- Highlights – Side A DIC Liability