Directors & Officers Liability

Individuals who serve as directors and officers of organizations are fiduciaries. They are responsible for managing the affairs of these organizations and must act with due diligence in discharging their responsibilities. If the absence of such care causes a loss for the organization, or its shareholders, the directors and officers can be held personally liable.

This coverage is intended to serve as “mistake” insurance for directors and officers of corporations and non-profit organizations.

Directors and officers liability insurance also covers an organization’s obligation to indemnify its directors and officers for claims made against them. Such obligations are required by statutes and/or are specified in the corporation’s charter of bylaws. An organization’s willingness to provide both direct coverage by means of D&O insurance and an indemnification agreement serves as additional reassurance to prospective board members who might otherwise be reluctant to assume the risk of serving as a company director.