Directors and Officers Liability

Corporate directors are liable for the corporation's actions

as well as their own.

Strangely, likely plaintiffs in a lawsuit against corporate directors are commonly the shareholders who appointed them in the first place. As a result, directors often require protection so that their own personal wealth is not expropriated in the event of a

good faith error. D&O insurance also protects the shareholders. 

Company Directors and Officers may be sued by shareholders and customers, as well as competitors, government bodies, creditors and others.

Relatively few private company management liability claims make headlines, but these claims are filed virtually everyday by employees charging private company directors and officers with wrongful termination, discrimination and harassment. Courts have held both management and the company responsible for wrongful acts of subordinates, and for negligent supervision, improper screening of employees, and failing to investigate or respond to employment-related violations. Right or wrong, employment claims are costly, some 85 percent of all employment practices cases are settled, usually for undisclosed amounts. And the number of employment practices claims filed against directors and officers has doubled in recent years.

Nearly 80,000 employment practices claims were filed with the EEOC in 1999; monetary damages in these cases topped $200 million – compared to $169 million in 1998. The most common charges filed with the EEOC in 1999 were ...

• racial discrimination (37.3%),
• sex discrimination (30.9%),
• retaliation (25.4%),
• disability discrimination (22.4%),
• age discrimination (18.3%).

The purchase of directors and officers insurance is critical:

• D&O insurance can take private companies through their IPO and into public ownership well protected.
• Complex claims brought by competitors, such as anti-trust and unfair competition claims against directors and officers, can generate sky-high defense and settlement costs.
• Investigations by government and regulatory agencies can generate enormous defense costs – – even if no wrongdoing is found. And when wrongdoing is found, settlement values are often severe.
• During the bankruptcy wave of the past there have been a record amount of creditor claims and bankruptcy trustee claims against bankrupt company boards. Lenders have sought restitution at the expense of the individual board members personal assets.
• Company assets can be closely tied to the personal wealth of directors and officers, making protection for claims brought solely against the company vital.
• When the company cannot indemnify its directors and officers in D&O claims, D&O insurance can step in instead.
• Shareholders of private companies frequently sue for inadequate or inaccurate disclosure in financial reports and statements made in private placement materials.
• D&O insurance can protect the personal assets of a director’s or officer’s spouse, as well as the assets of a deceased director’s or officer’s estate.
• With D&O insurance in place, management can focus on managing the company rather than managing protracted litigation

  click here for my General Liability products

  click here for my Errors and Omissions products

  click here for my Employment Practices Liability products

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Corporate Directors & Officers Liability

Private Companies need Directors & Officers Liability Insurance Too!

	Directors & Officers risk their personal assets.  They are personally liable for their business decisions.  They can and are sued as individuals.
	Fiduciaries of Pension and Benefit plans are personally for their decisions as well as for the actions of outside providers.
	Can a small company bear the financial impact of unexpected and costly Directors & Officers, Employment Practices or Fiduciary claim?
	Private Companies face claims from their employees, customers, suppliers, competitors, lenders and shareholders.

 Broad Coverage Features Include:

	Offers Directors & Officers Liability and Employment Practices Liability coverage with separate limits.
	Unlimited Employment Practices Liability defense outside of the EPL limit for firms with up to 200 employees.
	Employment Practices Liability automatically includes Third Party Sexual Harassment coverage
	Optional Third Party Discrimination coverage available for most classes.
	Entity coverage is automatically included

Expanded Employment Practices Liability includes 12 named perils including employment claims arising from use of the insured’s internet or email system:

	Unlimited Extended Reporting Period for former Directors & Officers
	Automatic coverage for service on outside 50©(3) non-profit boards
	Punitive Damages coverage included automatically where insurable
	Optional Fiduciary Liability coverage extension available, automatically includes Employee Benefits Liability coverage
	Optional standalone Directors & Officers Liability Insurance policy
	Free human resources consultation help line with unlimited call access

Non Profit Directors & Officers Liability

Is a Director or Officer of a Non-Profit Organization Immune from Liability?

	Immunity does not prevent an organization from being sued
	Immunity typically applies to volunteers, not to paid employees or the organization itself
	Nearly 85% of Non Profits have an annual budget that is less than the average cost to defend a claims closed by litigation
	The Personal Assets of the Directors and/or Officers are at risk

Why include Employment Practices Liability coverage on

the Directors & Officers Liability policy?

	Employment-related laws are the same for any type of organization
	Over 90% of the claims against Non-Profit organizations are Employment Practices-related
	These Employment Practices claims may include Wrongful Termination, Third Party Sexual Harassment, and Third Party Discrimination

 Broad Coverage Features Include:

	Defense Outside the Limit of Liability on all Claims
	Separate Limits of Liability for D&O and EPL Claims – D&O limit not eroded by employment claims
	Punitive Damages, where insurable by law, included automatically
	Third Party Sexual Harassment and Third Party Discrimination Coverage
	Unlimited Extended Reporting Period for Former Directors and Officers – Occurrence feature for former D&O’s
	Coverage for both Monetary and Non-Monetary Claims
	Coverage for Outside Directorship Liability

Public Officials Liability

This product is designed for Special Service Districts, providing Directors & Officers, Public Official and Employment Practices Liability coverage.

Why do Special Service Districts need Directors and Officers (D&O) and Employment Practices Liability(EPL)?

	Directors & Officers can be sued independently of the company for their decisions.  The only protection between a claim and your personal assets my be a D&O policy.
	The average cost to defend a claim resulting in litigation exceeds the annual budget of nearly 85% of all Special Service Districts
	Over 30 million employment cases have been filed in federal, state and local courts
	65% of employers who have fired an employee have been hit with a lawsuit
	10% of all wrongful termination and discrimination claim award are in excess of $1 million

 Broad Coverage Features Include:

	Separate Limits of Liability for D&O and EPL claims (D&O is not eroded by employment claims)
	Defense Outside the Limit of Liability on all Claims
	Punitive Damages where insurable by law, included automatically
	Third Party Sexual Harassment and Third Party Discrimination Coverage
	Unlimited Extended Reporting Period for Former Officials
	Optional Fiduciary Liability Coverage Extension

Community Association Directors & Officers Liability

Great news!

Enhanced underwriting guidelines for Community Association Directors & Officers.

New Eligibility includes:

	Associations with up to 2000 units*
	Average unit values up to $2,000,000*
	Associations with builder/developer representation on the board*
	Associations affiliated with a Country Club or Golf Course*

*must be submitted for proposal- not eligible to quote using online quoting system

This Directors & Officers Liability Product is designed to meet the unique coverage needs of Homeowners Associations and Condominium Associations.

Product Features:

	Manager/Management company automatically named as an additional insured
	Employment Practices Liability included for no additional premium for 10 employees or less
	Breach of Contract coverage*
	No exclusion for libel, slander or defamation
	Unlimited Extended Reporting Period for former Directors and Officers
	Defense outside the limit of liability

  click here for my General Liability products

  click here for my Errors and Omissions products

  click here for my Employment Practices Liability products