Who needs D&O coverage?
Many wrongly assume that Directors' and Officers' (D&O) insurance is only necessary for publicly traded companies. However, privately held organizations can just as easily fall victim to lawsuits that can impact the company, its officers, and the board.
D&O Insurance provides many benefits to privately held companies.
Legal Cost Reimbursement
D&O policies can provide legal cost coverage for a variety of claims. D&O insurance can provide reimbursement to the leadership of private companies following allegations of wrongful acts, financial mismanagement, errors in judgment, and negligence. Because D&O lawsuits can occur without warning and easily reach six figures, it’s critical that private company leaders arm themselves with the right policy.
Peace of Mind
D&O claims can come from a variety of sources, including employees, clients, contractors and government bodies. For private companies, claims from creditors and competitors are particularly common. D&O insurance ensures that private company leaders are protected regardless of where claims originate, helping provide timely and effective coverage.
An Improved Ability to Attract New Directors
Having a strong D&O Policy in place makes board seats more attractive. Purchasing insurance shows prospective leaders that you take D&O risks seriously and are prepared to protect them in the event of a claim.
Want to learn more about D&O Insurance for private companies?
Many private organizations don’t believe they need D&O Insurance. This can be dangerous thinking, as just one D&O claim can drain the personal assets of a company’s leadership team.
To learn more about D&O insurance, contact your local Marshall & Sterling office.