Directors and Officers Insurance (D&O)

• Coverage: Protects directors and officers from personal liability for alleged wrongful acts, errors, omissions, or breaches of duty committed in their capacity as company executives ; Covers claims related to negligence, mismanagement, employment practices, fraud, breach of fiduciary duty, and other alleged wrongful acts.
• Insured Parties: Primary insured parties are directors and officers of a company, including executives, board members, and managers. Coverage may extend to other employees or the company itself, depending on the policy's terms.
• Personal Liability: Provides coverage for personal liability, meaning it protects directors and officers from potential financial loss due to legal actions brought against them individually. Liabilities that the company itself may face are not covered.
• Policy Limits and Deductibles: The policy has specific limits of liability, which represent the maximum amount the insurer will pay for covered claims. The policy also has deductibles, which are the amounts that the insured individuals must pay out of pocket before the insurance coverage kicks in.
• Claims Examples: Examples include shareholder lawsuits, allegations of misrepresentation in financial statements, employment practices violations, regulatory investigations, breach of fiduciary duty claims, and more.

Coverage Types: D&O insurance usually consists of three coverage sections, which are

• Side A:Provides coverage when the company is unable or legally prohibited from indemnifying its directors and officers.
• Side B:Covers the company's reimbursement when it indemnifies its directors and officers.
• Side C: Covers claims against the company itself, often related to securities claims.

This policy is crucial for attracting and retaining talented directors and officers, as it provides them with financial protection and helps mitigate personal risk in their leadership roles. It also protects the interests of the company and its shareholders by providing coverage for potential liabilities arising from executive decisions and actions.

Note: The terms, conditions, and coverage specifics can vary between insurance providers and policies. Customers need to review and understand the policy terms carefully.