All posts in Directors and Officers Insurance

Protect Your Company Against Management Liability

Protect Your Company Against Management Liability

When a company’s directors and officers are primarily responsible for its managerial functions and fiduciary duties, both the company and the directors and officers can face liability in the event of losses or damages resulting from wrongdoing. Companies need to protect both themselves and their directors and officers against all possible claims.

Examples of D&O Claims

Typically, D&O claims arise from situations in which directors or corporate officers are alleged to have failed to perform their management duties lawfully:

  • A company was sued for a business tort when it tried to recruit a competitor’s employee who was bound by a non-compete agreement
  • Corporate officers were alleged to have failed to disclose material information to investors
  • A company made charges immediately before filing for bankruptcy, fraudulently misrepresenting its ability to pay what was charged

The Financial Impact of D&O Claims

When a company and its directors or officers are sued jointly or severally, litigation costs alone can amount to tens or hundreds of thousands of dollars. Likewise, if a company loses a suit, they and their directors and officers may be ordered to pay hundreds of thousands of dollars.

Companies need to ensure that their insurance coverage will apply to claims made directly against directors and officers. It’s advisable that they work with an insurance carrier who can advise them about their risk exposure and necessary coverage levels.

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Educators Require Comprehensive Insurance to Remain Protected

Educational institutions often face many unique exposures that are not found in other industries. This is especially true for board members, who may be held accountable if their determinations result in financial loss. As a result, retaining dependable insurance is a must for those tasked with providing essential educational resources to students.

What Is Directors and Officers Insurance?

A directors and officers policy protects high-level personnel from lawsuits related to negligent or wrongful service. This typically involves managerial decisions that are shown to cause financial loss to specific entity, which can then result in stringent legal action.

The total financial impact of litigation can be felt at every level. Directors and officers insurance helps mitigate ill-effects by providing funding for things like defense costs, as well as offering reimbursement for financial losses experienced due to ongoing proceedings.

How Can These Policies Benefit Educators?

It’s important for instructors to focus on how to best instill in students the knowledge necessary for prolonged success. Such focus can be shifted by pending lawsuits, which may hamper the decision-making process while also creating financial instability.

A directors and officers for educators policy allows instructors to concentrate on what’s most important without worrying about possible legal fallout. Such fallout can include many types of claims which may have far-reaching effects on an educational institution as a whole.

Insurance Suited to Your Needs

Comprehensive coverage allows every level of educator the ability to afford students the tools they need to achieve both personal and professional success. Directors and officers for educators insurance is just one such policy that all educational institutions must have in place to ensure they remain protected.

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Finding the Best Professional Liability Insurance

Finding the Best Professional Liability Insurance

Directors and Officers insurance is an important consideration for anyone who is truly interested in leading an organization as confidently and safely as possible.

Lead with Confidence

The most confident leaders are those who have a thorough understanding of the risks involved in whatever venture they are undertaking and who know that they have done everything possible to minimize or even eliminate those risks. Properly insured directors and officers are likely to be more confident than others because they know they are protected against certain mistakes or accidents. Directors and Officers insurance can pay for any damages for which an insurance holder has been found liable and it can also cover costs associated with an insurance holder’s defense. A Perfect Pair Partnering with the right insurance agency when purchasing Directors and Officers insurance is one of the most important business decisions a leader can make. It is important for people looking to purchase any kind of professional liability insurance to choose an agent who not only knows the insurance business but who also has a solid understanding of the kind of business being insured. Because insurance agencies have a wide variety of specialties, there is an agency for virtually any kind of business venture. Finding the best professional liability insurance for specific circumstances occasionally requires time, thought, and research. Putting energy into this important decision can however be the difference between bankruptcy and success.

 

photo credit: SychiO cc
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