Directors and Officers Insurance
Get directors and officers insurance to protect your business from claims and lawsuits.
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Directors and Officers Insurance Quotes
Protect Your People and Business with D&O Insurance
Professional liability insurance for directors and officers helps protect your company or firm from risks not typically covered by general commercial liability policies. Just as medical practitioners need malpractice insurance, you need professional liability coverage for the directors and officers who run your business. Directors and Officers Insurance (also called D&O insurance) is an essential part of a comprehensive business insurance portfolio for your for-profit or not-for-profit operation. If you already have a policy, you should review it periodically to make sure it is up to date. As your business expands, it’s a wise idea to increase your coverage limits and reduce your exposure to claims.
You can get quotes for directors and officers professional liability by entering your zip code at the top of this page or by learning more about the cost of Errors and Omissions Insurance.
Who Needs Professional Liability Insurance for Directors and Officers?
You need professional liability insurance if:
- Your for-profit or non-profit operation has a board of directors and/or corporate officers
- You sit on a board of directors
- Your board of directors is sometimes faced with making unpopular decisions
- The products or services provided by your company or firm are potentially controversial
What Professional Liability Risks Do the Directors and Officers of Your Firm Face?
Has your company ever been sued by its shareholders? Do you manufacturer high-profile or controversial products? Do you provide services that could put you in the cross-hairs for a law suit? Have your board of directors or officers ever had problems with independent contractors, vendors or employees?
The directors and officers of corporations and other business entities, whether publicly traded or privately held , have highly visible positions of great fiduciary responsibility. Increasingly, courts are holding directors and officers personally liable for abuse of authority, libel, slander, financial mismanagement and similar acts in law suits brought by shareholders, creditors, customers, employees, former employees and even people who have interviewed with a company or served as volunteers!
Non-profit organizations face special risks. While many corporations can afford to indemnify their directors and officers against law suits to a certain degree, non-profit organizations typically do not have the funds to mount a defense or to pay any settlements that may arise from a law suit.
What Does D&O Insurance Cover
D&O insurance covers the costs and damages resulting from law suits such as those mentioned above up to the limits of the policy. It is generally designed to help protect both the assets of the company and the personal assets of the individual board member or officer. D&O insurance normally covers liabilities that arise when an individual or group acts in the capacity of a director or an officer for business or practice. D&O insurance is not designed to cover small exposures. In most cases, a D&O policy’s deductible is sufficiently large that invoking the policy only makes sense when the firm is faced with significant allegations of fraud, fiduciary misconduct and other serious wrongdoing.
Affordable Quotes for Directors and Officers Professional Liability Insurance
Rates for D&O insurance are affordably priced. Depending on deductibles and other variables, D&O insurance can cost approximately $60 to $100 per employee per year. A typical deductible is $5,000. Many companies prefer a higher deductible, with a correspondingly lower premium, choosing only to invoke the policy when faced with a major lawsuit. As with any insurance product, higher coverage limits and an active claims history will result in higher premiums.
You can get competitive quotes from one or more insurance companies offering D&O insurance coverage by completing the form at the top of this page. If you don’t wish to purchase D&O insurance now, please leave your policy expiration date on the form provided. When your expiration date is closer, you will be contacted so that you can comparison shop for D&O insurance at that time.
Protect your business from exposure to risk. Get quotes for D&O insurance now.
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Frequently Asked Questions (FAQs)
Get clear answers to common insurance questions and important details to guide your coverage decisions.
What is Directors and Officers (D&O) Liability Insurance?
Directors and Officers (D&O) Liability Insurance provides protection for directors and officers of a company against personal losses if they are sued due to their actions in managing the business. This coverage can include legal fees, settlements, and other costs related to claims of wrongful acts like mismanagement, breach of fiduciary duty, or failure to comply with regulations.
What types of claims are covered by D&O Insurance?
D&O Insurance typically covers claims related to wrongful acts such as breach of fiduciary duty, misrepresentation, fraud allegations, and failure to meet regulatory compliance. It can also cover employment-related claims like wrongful termination or harassment suits, as well as claims brought by investors or creditors.
What does D&O Insurance not cover?
While D&O Insurance offers broad protection, it does not cover fraudulent acts, criminal activities, or claims involving personal gain. In addition, fines, penalties, or taxes incurred due to illegal actions are generally excluded from coverage.
Who needs D&O Insurance?
D&O Insurance is ideal for companies with a corporate board or advisory committee, including publicly traded companies, private businesses, and non-profits. Investors often require D&O coverage as a condition for funding, making it especially important for startups and companies seeking outside investment.
How much does D&O Insurance cost?
The cost of D&O Insurance varies based on several factors, including the size of the business, the industry, and the coverage limits. For example, a private company with annual revenue of $50 million may pay around $15,000 annually for a $2.6 million policy. Larger companies and those in high-risk industries like financial services may face higher premiums.
How can I save money on D&O Insurance?
To manage costs, businesses can shop around for quotes from multiple providers, choose higher deductibles, and review their policies regularly to ensure they meet their evolving needs. Companies with strong compliance programs and fewer claims may also benefit from lower premiums.
What should I consider when choosing a D&O policy?
When selecting a D&O policy, assess your business’s risk factors, including potential legal challenges from shareholders, employees, and competitors. Make sure the policy covers the specific risks faced by your business, and consult with an insurance expert to identify any coverage gaps.
