The Growing Need for Directors and Officers Insurance

Being a leader doesn’t mean you’re always fearless-on the contrary, knowing that directors and officers can face a great deal of liability in the course of helming their company can leave you sleepless at night. Consider that more than 95% of claims filed against directors and officers are for issues such as harassment, discrimination, wrongful termination, and such. With companies often needing to reduce staff to save operations costs, employment-related disputes continue to be a frequent source of litigation. That’s why it is so important to make sure your company’s senior leadership is protected from this exposure. A policy from a leading insurance provider can offer this protection in the form of coverage that shields directors and officers from the personal liability they could face should they be named in a lawsuit. The policy covers the often substantial costs of legal fees and other court costs, including judgments. In some cases, the policy may also be extended to protect the company itself in the event it, too, is named as a co-defendant in the lawsuit.

How much coverage to purchase?

While there’s no crystal ball to tell you the exact amount of coverage you’ll need for any given year, your professional insurance agent has the experience and knowledge to guide you in this choice. He or she will talk with you about the variety of factors that can influence your decision concerning what is an appropriate policy for you, including historical data analysis and examination of benchmarking studies. Another driver which cannot be denied, though, includes the requests-or even requirements-of the company’s leadership team.

Increasingly, senior executives are more and more likely to insist on having a certain amount of this liability protection in place as a condition of employment. Not having a policy, or not being perceived as having a sufficient amount of coverage, could make it difficult to retain or even attract a first-rate leadership team that has come to expect this type of insurance as a necessary component in a truly competitive employment package.

Don’t put your board members’ financial health in jeopardy unnecessarily. Talk to your professional insurance agent about your Directors and Officers insurance needs so your company’s leadership can stay focused on the business, not the risk of doing business.