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Directors & Officers Liability Insurance for Your Business

Company directors and officers today face increased scrutiny by regulators, shareholders, and plaintiffs, with the volume of lawsuits and investigations continuing to rise. Public companies to protect against management liability exposures readily procure Directors & Officers (D&O) Liability insurance, which provides an invaluable safety net by covering the ever-increasing costs involved in dealing with such risks. Private companies, however, do not universally purchase D&O insurance, believing it’s not necessary because they are either a family run business or have had no previous experience with such claims. This is a mistake that could prove detrimental to the profits and reputation of an organization.

ISU-The Olson Duncan Agency offers a complete line-up of business insurance products, including coverage for directors and officers for public, private and non-profit organizations.

On the Agenda of A D&O Policy

D&O Liability insurance can be written to cover the directors and officers of public companies, privately held firms, not-for-profit organizations, and educational institutions. Coverage is provided for claims resulting from managerial decisions that have adverse financial consequences. This includes lawsuits involving shareholder suits over company or stock performance, creditor or investor suits over mismanagement or dereliction of fiduciary duties, failure to comply with regulations or laws, employment practices and HR issues, pollution and regulatory claims, and cyber liability exposures.

There are several elements—known as “Sides”—to a D&O policy, including:

  • Side A—Protects a corporation’s directors and officers when the company cannot indemnify the individuals.
  • Side B—Reimburses the organization when it indemnifies the individuals, protecting the company’s balance sheet.
  • Side C—Also known as “entity coverage,” this covers both directors and officers and the insured organization when they are named as co-defendants in a securities lawsuit.

More than Executive Protection

In addition to providing a safeguard for your company and executives against allegations of wrongdoing, D&O insurance offers several other benefits including your ability as a business to retain strong leaders. Many potential directors and officers will be reluctant to join your business if they are exposed to personal liability. With D&O insurance you are addressing this issue. Having D&O coverage also facilitates the ability to attract investment – venture capital and private equity firms often require companies to have D&O coverage before they make an investment.

Our Value

At ISU-The Olson Duncan Agency, we look to provide clients with a total solution, not simply a quote or an insurance contract. Our goal is to provide real value and build a long-term relationship based on trust. This is underscored by the fact that we provide our clients with their risk management and insurance solutions, including property & casualty, employee benefits and personal insurance. To find out more about how we can help you, call us at (310) 373-6441.