Public, private, nonprofit – indeed all organizations, and those who lead them have significant exposure to D&O liability. This exposure can include: securities litigation, regulatory actions, and allegations of misrepresentation and breaches of fiduciary duties.
Actions brought against directors and officers based upon actual or alleged wrongful acts arising from the execution of their day-to-day duties and management functions can result in a D&O claim. D&O liability insurance protects the personal assets of directors and officers from catastrophic financial loss in the event of such a claim. The D&O policy also provides coverage for the organization.
It is common for directors to require that a company purchase D&O liability insurance before they serve on its board. Litigation expenses alone can amount to millions of dollars. D&O coverage can help protect the directors and officers from personal financial loss relating to these expenses.