by
on July 30, 2024
Directors and officers (D&O) insurance provides corporate directors and officers with coverage for managerial decisions that negatively impact the company. This insurance may generally cover legal fees, settlements, and other costs related to their defense. All types of businesses should seriously consider D&O insurance, but there’s a common misconception that private companies may not need to purchase this type of coverage. However, even small companies with no formal board of directors or shareholders can have D&O exposures. In fact, more than 25% of private companies reported a D&O loss over the span of three years, with 96% being negatively impacted financially, according to a study by insurance company Chubb.
D&O claims against private companies can be severe and result in costly litigation. A D&O policy can be used to:
Common D&O claims include breaches of fiduciary duty, failure to comply with regulations, a lack of corporate governance, creditor claims and reporting errors. These can be brought forth by various parties, including:
To learn more about D&O insurance and its benefits, contact us today.
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