Directors and Officers insurance or (D&O) Liability Insurance is an insurance coverage sought by public, private and non-profit organizations to help protect their executives from costly legal actions.

Every decision a company’s directors and officers make has the potential to be scrutinized by clients, employees, shareholders, and other directors and officers. These stakeholders may file a lawsuit if they believe a decision adversely affects their best interests. And the stakes are high—directors and officers risk losing their personal assets if they’re ever involved in a lawsuit for a decision made in the course of performing their regular duties.

Regardless of your company’s size, the legal costs associated with a lawsuit can be crippling. If your company does not insure this risk, qualified directors and officers may be hesitant to join your team for fear of personal liability in the event of wrongful acts or an error. To help recruit strong leaders as well as ensure the well-being of existing leaders and your company, a Directors and Officers Liability Insurance (D&O) policy should be part of your comprehensive risk financing strategy.

Any company with a Board of Directors should consider D&O coverage. This applies equally to public, private and non-profit organizations. D&O coverage will not only help you attract the best leaders but also allows them to operate without fear.

It can cover the individuals serving as Directors and Officers or the company itself.

Typically coverage includes:

• Breach of legal or fiduciary duties
  
• Failure to disclose conflicts of interest
  
• Decisions that bring adverse financial consequences for shareholders
  
• Allegations of misrepresentation
  
• Neglectful Acts
  
• Wrongful dismissals and employee discrimination claims
  
• Misleading statements, reporting issues, or inaccurate disclosure
  
• Failure to adhere to provincial or federal laws and/or regulations
  
• Coverage generally extends to past, present and future directors and officers of the company.
  

Cost varies according to risk factors such as:

• Company size
  
• Industry
  
• Location
• Depth of employee training
  
• Past lawsuits
  
• Quality control procedures
  

Average Claim = $288,000

Average Cost = $1,000 per year

No matter the size of your company, costly mistakes made by directors and officers can happen, which is why it’s important to take steps to insure your executives against losses stemming from an incident.

Contact CMB Insurance Brokers today to learn about the D&O coverage solution that’s right for you.