D & O Liability definition: Coverage for defense costs and damages (awards and settlements) arising out of wrongful act allegations and lawsuits brought against an organizations board of directors and/or officers.
Your organization’s assets and the personal assets of its directors and officers are at risk with every decision you make, every day.
Why you and your organization need protection
All organizations, whether publicly or privately held, and the people who lead them, are vulnerable to a multitude of Directors & Officers (D&O) exposures. These can include securities litigation, regulatory actions, allegations of misrepresentation and other breaches of fiduciary duties. Mergers and acquisitions, signs of financial weakness and perceived conflicts of interest can all be triggers for shareholders, competitors, customers, employees and government entities to make devastating claims against directors and officers.
Directors and Officers claims have become increasingly common. Directors and officers themselves can be held personally liable for these claims. To attract and retain qualified executives and board members, it’s crucial to have a comprehensive insurance program in place. Seventy percent or more of all directors and officers have inquired about the amount and scope of their organizations’ D&O coverage.
Directors and Officers Liability policies have a broad definition of claim and cover the defense costs, settlements and judgments associated with claims. D&O policies not only help provide protection for the assets of the organization and the personal assets of its directors and officers, but also help protect the personal assets of a director or officer’s spouse, domestic partner or the deceased director or officer’s estate.
FACT: 36 percent of all organizations have reported D&O claims in the last 10 years (according to a 2012 Towers Watson Directors and Officers Liability Survey)
Published by: The Travelers Indemnity Company