Directors & Officers Liability Insurance protects senior management's personal assets from exposure to lawsuits.
Directors & Officers Liability (D&O) Insurance covers:
1. Legal defence costs for Directors & Officers
2. Legal compensation awarded (damages and settlements)
71% of all lawsuits filed against company Directors are won by plaintiffs. When you are sued as a company Director or Officer, your house, your car, and other personal assets are fair game for legal damages. These lawsuits could come from almost anywhere: dissatisfied clients; shareholders who feel you made wrong judgements and hurt their interests; or employees who feel they were wrongly terminated. Without D&O Liability Insurance, you could potentially be on the hook for hundreds of thousands or even millions in lawyer fees and damages.
It is thus absolutely crucial to have a Directors & Officers Liability policy in place to prevent losing precious personal assets to someone else. Litigation costs are often extremely expensive, so paying a small annual fee in exchange for generous legal protection is highly recommended.