Directors & Officers Liability Insurance

What Does Directors & Officers Liability Cover?

Any privately held company board members and officers can be sued over their day-to-day actions or decisions by:

• Competitors
• Creditors and lenders
• Customers and clients
• Government regulators
• Investors and shareholders

The alleged wrongdoings can include, but are not limited to:

• Breach of fiduciary duty or mismanagement of the business and operations
• Consumer protection violation
• Disclosure of materially false or misleading information
• Failure to deliver services
• Self-dealing and conflicts of interest
• Unfair trade practices
• Violation of state and federal laws
• Wrongful interference with a contract

An outside directorship liability policy is available as supplementary protection to assure sufficient limits for the exposure created when a company’s director, officer, or employee serves in an outside director position at its request.

Who Needs D&O Coverage?

Directors and officers face risks to their personal assets from multiple sources, from increased scrutiny by the SEC to class action and derivative lawsuits and rising defense costs. Many corporations, non-profit organizations, and professional service firms provide a level of protection for their directors and officers through a D&O policy purchased by the firm.

It is a common misconception that general liability insurance and umbrella insurance coverage will take care of every possible lawsuit. However, general liability insurance does not typically cover the financial consequences for the alleged wrongdoings listed above.

Outside Directorship Liability Insurance

Companies often encourage their employees to contribute their time and talents to community activities, including service as directors, officers, or other leaders of nonprofit and for-profit organizations. While outside board directorships can be a useful extension of corporate activity and represent good corporate citizenship, in today’s litigious society, they can also create complicated liability issues and exposure for both the company and the individuals who serve.

Outside Directorship Liability insurance plans provide a separate and distinct limit of liability independent of a company’s directors and officers (D&O) liability limit.

Protect Your Personal Assets

If you are a director or officer, it is critical that you protect yourself and your family from the financial consequences of such exposures. It is not sufficient to ask if your company has D&O insurance. A consultation with an insurance risk management specialist can help you obtain a more thorough understanding of your exposure to risk and the levels of protection from any company-provided plan, allowing you to make an informed decision as to whether securing additional protection is warranted.

We are here to assist you in evaluating your exposures and the level of protection required to meet your goals.

The Brunswick Advantage

Brunswick Companies offers Directors and Officers Liability insurance policies from a wide range of top ranked carriers. With over 35 years of commercial experience, we have the know-how and industry contacts to match your needs with the plan that best suits your risk management and financial goals.