Directors and officers are vulnerable to lawsuits related to their roles and how they manage the affairs of their organizations. It doesn’t matter if you own a corporation, a small business, or a non-profit organization in Colorado – you are not immune to lawsuits. As long as you have an advisory body or a corporate board, you should seriously consider investing in directors and officers (D&O) liability insurance.
Protect Against the Risk of Wrongful Act Claims
A D&O policy typically covers past, current, and future directors and officers of your company and even its subsidiaries.
The policy provides your executives with financial protection from hefty legal claims of alleged or actual wrongdoings while performing their company responsibilities. It shields them against personal losses and can compensate the defense costs, settlement costs, and other legal fees your company has spent in defending them.
Any action or decision actually or allegedly committed by your organization’s director or officer can lead to a lawsuit. This can include:
However, the coverage excludes bodily harm and property damage, penalties and fines, losses due to fraudulent or criminal activities, dishonesty, and illegal remuneration or profit.
While directors and officers may commit any decision or action without malice or intention, they may still be held liable. They face the risk of being sued by individuals or parties that have transacted with them, including:
Industries Most Exposed to D&O Claims
Some insurers categorize industries based on their risk of exposure to D&O claims.
If your business is in the field of telecommunications, pharmaceuticals, or biotechnology, your directors and officers are at a higher risk of lawsuits. Sectors considered to be at medium to high risk of D&O claims include financial services, media, transportation, education, professional services, real estate, engineering, architectural, and construction.
Get D&O Coverage from Independent Agents in Colorado
D&O liability insurance should be part of any organization’s risk management strategy. No matter what the size and corporate structure of your company is, it’s always a wise decision to purchase D&O coverage.
Call us at 719-329-4441 to learn more about how the policy can benefit your business.