Directors & Officers Insurance
Any company or nonprofit organization that has a board of directors should consider directors and officers insurance (D & O), a type of management liability insurance.
A directors and officers liability policy insures board members from lawsuits over decisions they make while serving on your board. If they’re sued, they could have to pay thousands of dollars in legal costs. It can also help reimburse a business or nonprofit for the legal fees or other costs incurred in defending such individuals against lawsuits.
How Does Directors & Officers Liability Insurance Protect Board Members?
Your board members and officers face many of the same risks as your business: lawsuits over hiring and firing decisions, trademark issues, and mismanagement of funds. Unlike your business, they are not protected by general liability or professional liability policies. If they’re sued, D & O insurance can help pay the cost of hiring an attorney, judgments, settlements, and other expenses related to the lawsuit.
D & O liability insurance protects board members from lawsuits related to a variety of circumstances, including:
- Mismanaged funds
- Employee grievances
- Slander, libel, and copyright infringement claims
- Failure to follow organizational bylaws
- Failure to comply with regulations
Business owners and nonprofit organizations often choose to bundle D & O insurance with employment practices liability insurance (EPLI), another type of management liability insurance. EPLI can cover your legal costs if an employee sues your business over unfair hiring practices or another violation of employee rights. A management liability insurance bundle usually costs less than purchasing the policies separately.
Interested in learning more about directors and officers liability insurance? At Knight-Dik Insurance, we’ll work with you to design coverage that protects your business or organization from a variety of risks, unique to you. For a free insurance premium analysis, simply contact us here or call 800-286-6353.
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What Injuries Are Not Covered Under General Liability Insurance?
One of the most commonly used part of a general liability insurance policy is bodily injury liability, which covers medical expenses for those who are injured on a business’ property. Not all injuries are covered, however.
General Liability Protections for Small Companies Explained
As a small company, you may not think much about lawsuits or claims from customers. You work to provide a service or product to your customer and do your best at it. Yet, risk follows every company. Without general liability insurance, a small business is vulnerable to financial loss. In some cases, this can cause the folding of the company.