Your clients acting as directors and officers of a corporation might think that they are automatically free of liability, given that corporations are often formed to protect individuals from risk. But making that assumption can be incredibly costly. Sometimes, directors and officers have personal assets seized by creditors. And board members can always be sued by employees and third parties for non-bodily injuries like termination and discrimination.
It’s easy for directors and officers to feel immune, especially in friendly, open offices. Unfortunately, you can never tell when something will go wrong. All you can do is prepare for that inevitability with the right protection. Directors and officers liability insurance is important for all of your corporate clients. It helps to protect property, assets, securities, and even cash.
Why Directors and Officers Liability Insurance is Important
Everyone wants to avoid and protect against risk. That’s why people have auto insurance, homeowners insurance, and other liabilities coverage. Directors and officers liability insurance extends protection to people operating within corporations to handle the additional risk they face in those roles.
As mentioned, alleged wrongful termination and discrimination suits are the key risk factor for directors and officers. Discrimination may be alleged on such grounds as age, race, sex, employment status, and membership. Directors and officers may also face claims of harassment, wrongful termination, and the like, which can wind through the court system for an extended time.
Add in the potential for other suits, such as waste of assets, inefficient administration or supervision, libel and slander, or failure to deliver services, and your corporate clients are, in fact, facing a lot of potential problems. Directors and officers liability insurance indemnifies individuals from associated damages and costs.
Even when directors and officers have a valid defense, the costs of putting this defense forward can climb. Without directors and officers liability insurance, those costs are all the responsibility of the individuals in question.
Even nonprofits need directors and officers liability insurance. In fact, some say people in these roles need it more as nonprofits are sometimes not operated as stringently as for-profit organizations. Nonprofit officers and directors may also have less net worth than their for-profit counterparts, which means damages can be all the more devastating.
Contrary to popular belief amongst directors and officers, general liability insurance and even umbrella policies may not cover these situations. It’s important to work with your corporate clients to make sure that they have appropriate directors and officers liability insurance coverage that is specific to their industry and the risks they face.
It’s also important to note that corporations and nonprofits without this insurance may have a hard time finding anyone to fill the role of a director or officer. Nobody wants to be on the hook for business-related damages. Savvy individuals will make sure that D&O insurance is in place before agreeing to take on such a role. For your corporate and nonprofit clients to succeed, directors and officers liability insurance is non-negotiable.
Working with Prime Insurance Company for D&O Liability Insurance
Prime is your ideal partner for writing more business with directors and officers liability insurance for your clients. We keep a close eye on the industries we serve, noting emerging risks and working with our risk management experts to advise your clients on how to minimize issues.
For example, we know that cyber risk is becoming more of an issue for directors and officers, who can be held liable if confidential information is exposed in a data breach or through non-compliance with cybersecurity and privacy laws. Our risk management team, comprised of attorneys and industry experts, will advise your clients on how to proceed around this matter and others that expose them to risk. Our advice is based on personalized assessments and consultations.
If your clients need to make a claim under their D&O liability insurance, we manage that claim quickly but comprehensively. We offer 24-hour service and a commitment to open, clear communication. You and your clients will know exactly what is going on at all times.
Even if a client thinks they will have a hard time finding coverage having been denied by insurers previously, it’s worth getting in touch with us. Situations like these are our specialty. Get a directors and officers liability insurance quote here.
To learn more about Prime Insurance Company, send us an email at firstname.lastname@example.org, call us at 800-257-5590, or visit our website. For more about us, follow us on Facebook, LinkedIn, YouTube, Instagram, and Twitter.