Directors and officers insurance coverage (AKA D&O) has become a critical insurance component of any organizations risk management strategy, who else but an organizations board would demand coverage to protect their own personal assets from being involved in a settlement. Directors and Officers insurance coverage is put into place to protect the named officers of a company as their protection lies outside of the defined coverage found in other policies such as a commercial general liability policy or a professional liability policy. Since the the financial fallout of 2008 and the current economic downturn, the insurance market for directors and officer for organization that need it most has become increasing tight and is getting more expensive. The financial industry has been hit very hard by litigation from collapsed mortgage companies, insurance companies and financial institutions. Obtaining directors and officers coverage for these institutions has become increasingly difficult and occasionally must be obtain in the surplus lines market.
Sarbanes Oxley legislation has made the Dissectors and Officers insurance market place for publicly traded companies an increasingly expensive proposition. As companies go public to raise capital the risk of litigation from their shareholders increases as the number of shareholders increases. Class action law suit, suits arising out of failed mergers and a general beating in the market can all be cause for suits to be filed against C-Level officers and a companies board. It is no longer a policy of option for
publicly traded companies as directors and officers coverage was once seen as protection from a rare omission or poor decision. D&O has become a mandatory coverage for publicly traded companies as the above examples are seen as fairly common occurrences.
Other industries have been hit hard by the current economic conditions as well, for example, any organization that deals with franchising understands just how painful a downturn can be to the bottom line, but even worse when franchisees start to fail they turn to the franchisor for compensation. These suits come in the form of actions against the franchisors
professional liability coverage and their directors and officers.
Directors and officers or D&O can often be packaged with
Employment practices liability insurance and fiduciary liability coverage which can make the package as a whole not only more affordable but it can fill in gaps that would other wise be present should the coverages be purchased from multiple carriers. Obtaining
quotes for directors and officers insurance coverage is a fairly straight forward process and can be initiated with an online application by clicking here.
Labels: D andO, Directoers and Offiers Coverage, Public company D O QUOTES
