Directors and officers can be personally sued by share holders, creditors, employees, suppliers, customers, competitors or regulators. Suits can be bought for various reasons. Shareholders might sue for insider trading. Creditors might sue for misrepresenting the financial health of the company. Competitors might sue for anti-trust or unfair trade practices.
Being personally sued can be crippling for individual directors or officers. Just the risk of lawsuits might cause qualified individuals to refuse to take director or officer positions, or it could motivate existing officers or directors to act with excessive caution in pursuing a corporation’s interests. By insuring in Scurich Insurance Services directors or officers against personal liability for their own wrongful acts, D&O insurance addresses these concerns.
Any publicly traded company with a corporate board or advisory committee should consider director and officers liability insurance. Non-profit organizations and private companies could benefit as well from the protection offered by directors and officers liability insurance.
Some actions are excluded by all Directors and Officers Insurance Policy
- Bodily injury and property damage
- Intentional and dishonest acts
- Criminal acts
- Violations of state laws resulting in fines or penalties
- Pollution and nuclear waste.
- Libel, slander and false imprisonment
- Employment discrimination or wrongful termination
- Cases involving insured-against-insured actions (i.e., one director suing another)
- Failure to maintain proper insurance
- Punitive damages.
D&O policies cover claims made during the policy period. It doesn’t matter when the wrongful acts occurred. A claim arising from a lawsuit filed this year for a wrongful act committed last year is covered by this year’s policy. Directors and Officers Insurance is being customized for the unique needs of each client at Scurich Insurance Services. Coverage is generally for some fixed level of claims per year.
320 East Lake Avenue, PO Box 1170
Watsonville, CA 95077-1170
Toll Free: 1-800-320-3666