Insuring Directors and Officers for Public Companies

Insuring Directors and Officers for Public Companies

Insuring Directors and Officers for Public Companies

Directors and officers for public companies can oftentimes find themselves in the untenable position of being held legally liable for the performance of the company under their direction. If they are appropriately covered by a Directors and Officers insurance policy, then they should have no concerns about the impact of the business’s performance on their own personal finances. If they are not, however, then the cost of legal aid and possible penalties enacted by the courts could well have a significant impact on their lives.

Directors and officer insurance is a special insurance policy that covers a person of some responsibility against the threat of legal action due to a miscalculation in business policies enacted by that person. Coverage is available for those individuals holding an appropriate position in those companies with an annual revenue of at least $500,000, if the company has at least 3 officers or directors. The policy may protect the individual against risk or loss of up to $10,000,000, but of course that amount will be dependent upon the specific policy and any riders attached. All directors and officers of public companies should be sure to speak to a qualified insurance agent with some knowledge of their industry to ascertain their specific risks and ensure appropriate coverage.