Directors and Officers Liability Insurance

Safety Nets Don’t Seem Necessary Until the Unforeseen Happens. You Owe it to Yourself to Protect Your Name and Your Family.

Directors and Officers Liability Insurance provides coverage for situations where a decision was made by a director or officer resulting in a claim. Directors and Officers Insurance may not seem like a topic that you have to worry about, but after reviewing some recent statistics you may think twice.

  • 31% of private companies do not obtain D&O Insurance because they think their D&O risk is low or none, when in reality, 40% of mid-sized companies have faced a D&O lawsuit.
  • Directors and Officers are liable if they are found to lack requisite care of the company; i.e. due to negligence and failure to keep up to date with company information to make the best decisions for the firm.
  • Not only do Directors and Officers face risks, owners invested in a company can easily face similar risks.
  • 95% of Fortune 500 companies maintain Directors and Officers (“D&O”) liability insurance today.
  • 31% of all companies could expect to have at least one claim made against its Directors or Officers.

A company is not required to provide indemnification; therefore, as a Director, Officer or Owner, you want as much indemnification as you can get.

Directors and Officers Insurance (D&O) is designed to protect business owners, directors and officers of a corporation from liability in the event of a claim or lawsuit against them in connection with the company’s business. D&O provides financial protection in the event they are sued in conjunction with the performance of their duties as they relate to the company. These suits may result from employees, customers, competitors, or clients of the corporation, who feel negligent management is to blame for financial or other loss.

This policy is necessary for directors and officers of every company if they wish to avoid potential litigation such as:

  • Wrongful dismissal of an employee
  • Failure of supervision
  • Inaccuracy in statements of financial accounts
  • Lack of judgment and good faith
  • Mismanagement of funds
  • Unauthorized loans or investments
  • Failure to obtain competitive bids
  • Imprudent expansion resulting in a loss
  • Unwarranted dividend payment, salaries or compensation
  • Misrepresentation in acquisition agreement for the purchase of another company

D&O insurance also covers policyholders outside of the “office”. Personal assets (your home, valuables, and other personal items of value) are protected within this policy.

Covered persons under the GovTechTM D&O policy include the named insured, present and past employees, officers, owners, or directors/management of the organization and any legal representatives of deceased directors and officers.

GovTechTM will pay on behalf of the insured, up to the policy limits, for losses that the insured becomes legally liable for as a result of a claim arising out of the wrongful acts committed by the insured during the conduct of the insured business. GovTechTM will also provide supplementary payments in respect to any claim investigated, settled or defended for the insured.

Individually, you and your executive team have worked too hard and sacrificed too much to let it slip away. It’s time to protect yourself, your family – and your organization. While most policies are designed to protect your organization, it’s time to start thinking about the impact a claim may have on you personally. GovTechTM can provide you with the coverage you need to ensure individual peace of mind.

Are you a Director, Officer, or Owner in need of coverage? Request a quote.

*+Watson Wyatt Worldwide, D&O Liability Survey Report, at pp. 42-44.