Directors and officers can be held personally liable for decisions they make while serving on a company or organization’s board. Directors & Officers liability insurance protects these board members that could be held liable for the decisions they make while serving on the board. A D&O policy can help cover the costs of legal defense, damages and/or settlements if a company is sued for alleged wrongful acts. Having a D&O policy in place can also help attract and retain qualified executives and board members.
Directors and officers could be sued for a variety of reasons related to their role on a board including any of the following:
- Breach of fiduciary duty resulting in financial losses or even bankruptcy
- Misuse of company funds
- Misrepresentation of company assets
- Failure to comply with workplace laws