D&O Liability Insurance

Federal and state statutes govern the actions of corporations, private companies, and non-profit organizations. The directors and officers of these businesses must comply with the statutes and fulfill the duties owed to their organizations’ shareholders and stakeholders.  When laws are broken, or when directors and officers breach their duties, someone is usually damaged – shareholders may lose money, the organization may miss an opportunity to generate sales or increase membership, or an employee may be terminated. These events can lead to claims, lawsuits, and other actions against the directors and officers.  However, not all such exposures are covered under D&O insurance policies. Lawsuits filed by shareholders and criminal charges are obviously claims, and most policies also cover regulatory proceedings. Coverage is not always as clear when the company is under investigation and no charges have been filed, or when directors and officers are subpoenaed to testify. Currently, more policies have an expanded definition of a claim or more precise wording that defines exactly what is and what is not considered a claim.  This session will provide an overview of the types of claims that might implicate D&O insurance policies and what is considered a covered claim under such policies.