What is Directors & Officers Insurance?

Directors & Officers (D&O) liability insurance protects an organization’s directors and officers from personal financial loss if they are sued for wrongful acts while managing the company.

Posted on March 17, 2022 | Updated on November 28, 2023

There is a misconception that D&O claims only impact public companies. However, all organizations whether public, private, or non-profit are at risk for D&O claims.

What is covered under a Directors & Officers policy?

The insurance provides coverage for damages (awards and settlements) and legal defence costs and damages (awards and settlements) that may result from allegations of wrongful accounts and lawsuits brought against the board of directors.

Directors & Officers Liability Insurance Claims Examples

  • accusations of mismanagement
  • breach of fiduciary duties
  • misrepresentation to shareholders, creditors, and others
  • failure to comply with federal or provincial laws regarding workplace safety, employment practices, and environmental practices
  • company or stock underperformance
  • making decisions without proper authority or authorization

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