What is D&O Insurance?
Directors and Officers Liability Insurance provides financial protection for the directors and officers of your company in the event they are sued due to the performance of their duties as they relate to the company.
This liability insurance is payable to the directors and officers of the company, or to the organization(s) itself, to cover damages or defense costs in the event they suffer such losses as a result of a lawsuit for alleged wrongful acts while acting in their capacity as directors and officers. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors and officers simultaneously. It has become closely associated with broader management liability insurance, which covers liabilities of the corporation as well as the personal liabilities for the directors and officers of the corporation.
Why do Directors & Officers need Insurance?
Typical sources of claims include shareholders, shareholder-derivative actions, customers, regulators (including those that would bring civil and criminal charges), and competitors (for anti-trust or unfair trade practice allegations and Intellectual Property violations). Investors, especially Venture Capitalists, will also usually require Directors & Officers Liability insurance as part of the conditions of funding your company.
Which D&O action does the Insurance cover?
The policy is extended to cover "Wrongful Acts" as defined under the policy, which may include certain acts, omissions, misstatements while acting as a Director or Officer of the organization. The policy excludes coverage for fraud, illegal profits or gains, or intentional illegal conduct by such Director or Officer.
Reshef has a special Wording Endorsements with Insurance companies that extend the standard policy wording. Reshef expertise's in providing coverage for Start Up Companies, Public Traded and Private Companies as well, including International based Companies.