Managers’ and officers’ liability insurance – also known as D&O insurance – covers the cost of compensation claims made against your business’s directors and key managers (officers) for alleged wrongful actions. Directors and Officers Insurance (D&O) insurance cover the costs of legal defence, injuries, or adjustments if directors or officers of a company are sued for alleged wrongful acts. It protects those who could be held personally liable for private companies, nonprofits, and cultural institutions, and typically costs about $3,000 per year for $1 million in coverage.
Wrongful acts include:
- Breach of trust
- Breach of duty
- Neglect
- Error
- Misleading statements
- Wrongful trading
Do I need it?
If your company has directors or key managers, directors’ and officers’ liability insurance can cover the cost of return claims made against them by shareholders, investors, employees, controls or third parties.
Directors and officers have special duties, duties and powers relating to their positions. These are usually set out in their job kind or terms of reference. If a director or manager of your company is found to have acted outside of their terms of reference, civil, criminal or administrative proceedings can be brought against them.
Directors’ and officers’ liability insurance covers the cost of defending these proceedings, as well as any compensation costs that arise from an unsuccessful defence.
If directors and officers do not own insurance, they face a higher risk of not being able to protect themselves against:
- Disqualification from holding the position of director
- Civil actions which can lead to hefty legal costs and awards for damages
- Criminal prosecution which can lead to penalties and possible imprisonment
Directors & Officers Insurance Providers
Top D&O insurance providers offer opportunities to cover directors and officers groups of various types and sizes. Some business insurance providers work better with small companies and nonprofits, while others are better suited for larger risks. Depending on what the small business requirements, a provider with other insurance options to consolidate coverage can save cash and offer support.
1. CoverWallet
CoverWallet is an online insurance broker that does simple language and sophisticated back-end technology to help any small business owner find the right policy. As a broker, CoverWallet reaches D&O insurance policies from top carriers, giving business owners trust that coverage will be where if and when it is needed.
2. Insurance321
Insurance321 is a agent that focuses on bundling policies including the right carriers for the best coverage and pricing. They are extremely rated for their quality of service and specialized coverage types, including D&O insurance, which combines coverage for public and private companies as well as nonprofit regulations.
3. Embroker
Embroker is an online brokerage portal that works with carriers concentrating is certain commercial risks. By streamlining the method with its cutting-edge technology, Embroker reduces costly and frustrating paperwork required in archaic insurance models. A small business can shop all lines of insurance within the Embroker portal.
