Think of Directors’ and Officers’ Liability Insurance as management liability insurance.
The scope of coverage in the General Liability policy is limited to Bodily Injury, Property Damage or Personal and Advertising Injury, but what about the decisions that the directors and officers make every day? Not only do their decisions impact their employees, they also impact others in many ways.
What about a homeowners association that is charged with enforcement of rules, or the church board that decides how to spend its member’s contributions? On a larger scale, what about a company whose Directors’ and Officers’ make decisions that impact the shareholders of a company and the responsibility they are charged with to make wise and unbiased decisions. From non-profit organizations to privately held companies to large multi-national corporations with thousands of shareholders, there is a very broad spectrum of business types that need Directors’ and Officers’ Liability.
The one common element that precipitates the need for Directors’ and Officers’ Insurance is their duty to make wise and prudent decisions. D & O coverage can protect those charged with making those decisions.