Directors & Officers Insurance Coverage
Directors and Officers Liability insurance, sometimes called D&O, provides coverage for members of boards of directors against actual and alleged wrongful acts. These alleged wrongful acts might include actual or alleged errors, omissions, misleading statements, and neglect or breach of duty on the part of a board member(s). The D&O policy will provide the resources and expertise to defend the board and individual members against the allegation. Defence costs are sometimes included as part of the overall policy limit so knowing the total limit and purchasing what is required is important. That’s where our Tri-County Insurance brokers come in. We will help you get the insurance policy you require.
D&O insurance is intended to protect the personal assets of the individual directors and officers, and to reimburse the corporation if it has indemnified its directors and/or officers as stipulated in their corporation by-laws.
D&O insurance does have various exclusions and does not cover criminal acts, losses due to pollution, breach of fiduciary duties, giving of unprofessional advice, or employment discrimination issues to name a few. However, some policies may include this and, if not, coverage may be purchased for employment practice liability insurance or fiduciary liability insurance.
Duties of Directors Information
There are three basic duties of directors: 1) they have a duty of care – to act reasonably, in good faith and in the best interest of the organization 2) they have a duty of loyalty – to put the interest of the organization before their own and 3) they have a duty of obedience – to act within the scope of the organization and within their rules and laws.
Claims Made Information
Most directors and officers insurance policies are written on a “Claims-Made” basis which means that any claim must be made and/or reported within the policy period in which it occurred. These policies have retroactive dates – a date previous to the policy’s effective date where the alleged claim can be considered. The retroactive date is important as claims that arise out of an act prior to this retroactive date will not be covered by the policy.
Insured Persons In A D&O Insurance Policy
Most Directors and Officers Liability policies have a broad definition of who is covered under the policy and this typically includes any individual who is acting as a director, officer, trustee, employee, and volunteer, including the estates, heirs, and legal representatives of any said deceased or insolvent individuals.
For more information on Directors & Officers Insurance, contact our brokers at Tri-County Insurance. Call us today or click below to get an online quote.
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