Top 5 Reasons You Need D&O Coverage

There are many reasons you should protect yourself with Directors and Officers coverage, but the top 5 reasons are:

  1. Directors and officers can be held personally liable for claims; organizations increasingly consider personal liability coverage as one of the most important aspects of their D&O program.
  2. D&O liability claims related to regulatory actions are increasing for all types of organizations, representing 23 percent of claims in 2012.
  3. Directors and officers increasingly desire additional assurances beyond corporate indemnification — 43 percent desire added protection in the event their company becomes bankrupt and/or insolvent.
  4. Directors and officers and their respective organizations are susceptible to a wide range of claimants including shareholders, competitors, customers, employees and government entities.
  5. D&O claims are increasingly common for private companies, public companies and nonprofits: 36 percent of all organizations reported claims in the last 10 years.

Directors and Officers Liability policies have a broad definition of claim and cover the defense costs, settlements and judgments associated with claims. D&O policies not only help provide protection for the assets of the company and the personal assets of its directors and officers, but also help protect the personal assets of a director or officer’s spouse, domestic partner or the deceased director or officer’s estate.

Information gathered by a 2012 Towers Watson Directors and Officers Liability Survey

Published by: The Travelers Indemnity Company

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