Directors & Officers Insurance
Directors & Officers Insurance (D&O) is a type of liability coverage that provides protection for the board members, officers and directors of your company or organization from lawsuits that can arise from them performing their duties.
Do you need Directors & Officers Insurance?
Directors & Officers liability is becoming more the rule than the exception with businesses and organizations. This type of coverage protects the assets of your company and the personal assets of the individuals who are directors and officers of the organization.
The coverage will reimburse the company for amounts paid to Directors & Officers for expenses incurred as a result of claims made against them for wrongful acts and to which they are entitled by the company’s bylaws. Exclusions on this type of coverage would include illegal personal profit, illegal securities transactions, & deliberate dishonesty.
Common activities leading to Directors & Officers claims might include:
Acquisitions. mergers, management buy-outs, sale of corporate assets
Breach of contract
Waste or mismanagement of corporate assets
Bankruptcy or liquidation of the company
Changes in ownership
Employment practices which would include termination, discrimination, harassment
Defamation, libel, or slander
Misrepresentation & nondisclosure
Breach of duty care
Withholding of taxes
Directors & Officers Insurance Costs
Directors & Officers Insurance costs are based on a number of factors which include:
- Ownership structure
- Public company
- Private company
- Not-for-profit organization
- Type of business
- Business experience
- Financial condition
- Current ratio: compares an organisation’s assets and liabilities to measure its ability to pay its debts
- Debt-to-equity ratio: displays the proportion of shareholder equity and debt used to fund an organisation’s assets
- Interest cover ratio: determines how easily an organisation can pay the interest on its outstanding debts
- Profit margin: compares net profit against overall revenue to express an organisation’s operating profitability
- Quality of management
- Limits chosen
- Loss history
Reach out to me if you’re considering Directors & Officers Insurance. I will discuss with you how it works and assess if it fits into your risk management needs. If you determine this coverage is needed I will then provide you with comparative Directors & Officers Insurance quotes from multiple insurance carriers so you can get the best possible rate.
As an insurance broker I help businesses throughout Oregon and the Pacific Northwest manage risk.