Do You Need Directors and Operators Insurance for Your Employees?

Business owners understand the importance of having liability insurance protection. Clients, customers and even employees can sue the company for a variety of reasons. Many businesses, however, don’t have adequate insurance coverage for the executives making important decisions on behalf of the company.

What Type of Insurance Protects Your Executives and Directors?

Directors and officers liability coverage protects your board of directors or advisory committee from unwanted claims. D&O claims are filed against officers and directors for many reasons, including:

  • Employee Claims – These include such things as breach of an employee’s contract or negligence in following health and safety regulations.
  • Shareholders’ and Clients’ Concerns – If a director misrepresents the company’s financial assets to clients or shareholders, that mistake may result in financial harm to the third party. Deliberate misconduct, negligence and fraud will also result in lawsuits.
  • Competitors’ Claims – A competitor may claim that someone on the board of directors has been dishonest or has conducted illegal business dealings. Examples include sharing confidential information or trade secrets with other entities and advertising defamatory or misleading information about the competitor.

Without proper liability coverage, your directors and your company could be responsible for paying expensive legal fees and settlement costs.

Make sure your company and your board members are adequately protected from unwanted claims.

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