D&O insurance is an often-misunderstood type of insurance. The real name of it is Directors & Officers Liability insurance, but it is called D and O insurance for short. It is complex and difficult to understand in some regards, but in this overview guide, we will attempt to explain how it may be able to provide critical coverage to you and your company or organization.
Directors & Officers Liability Insurance: The Basics
Generally speaking, Directors &Officers liability insurance can be thought of us a kind of errors and omissions insurance. Its coverage provides lawyer fees and other defense costs for settlements, paying damages, and more in the even that there are accusations of liability made against a business or organization. There are generally several coverage components and agreements that go into one Directors &Officers liability insurance plan.
What Types of Claims Will Not Be Covered by Directors &Officers liability insurance?
There are numerous cases in which Directors &Officers liability insurance will come in handy for a business or organization. However, in some instances, it’s important to note that Directors &Officers liability insurance will not protect the directors and officers in a company.
Notably, if there is a lawsuit that is actually between officers and directors in a company, then these cases are usually not covered. This is the way that this type of insurance prevents collusion against an insurance agency. In addition, if fraudulent acts are found to be at the heart of a case (on behalf of an officer or director, for example), then defense and legal costs will only be paid until there is a verdict of guilty. At that point, the individual will need to repay all of the defense costs provided under the D&O insurance plan.
Understanding Your D&O Plan and Making Claims
With Directors &Officers liability insurance, it’s important to understand that what will actually be providing you protection is your insurance and not your lawyer. However, the cases at hand will be legal. This is confusion for a lot of directors and officers because their gut reaction in the event of a claim situation is to contact a lawyer. However, it is Directors &Officers liability insurance that will provide protection. It’s important to understand policy detail “notification” here.
Notification is the process you’ll need to undertake when you need to contact your insurance company for a claim. You’ll need to follow a specific timeline provided by your insurance company.
Purchase D&O Insurance Today for Your Protection
Are you interested in Directors &Officers liability insurance? It can save you hundreds of thousands of dollars in the event of a legal case against your company. Contact an insurance company that handles this type of insurance in your area today to learn more about your plan options.