Directors and Officers Liability

Directors and officers (D&O) liability insurance protects corporate officers and directors from claims alleging they performed their duties improperly. You should consider this coverage if your company is a corporation. Lawsuits against board members and company officers can generate large awards against the individuals themselves or the company.

Directors and officers are liable for negligent acts or errors they commit while serving the corporation. In some cases, they can be held personally responsible for the plaintiff’s injury. This means that their personal assets may be used to satisfy the plaintiff’s demand for damages. The fear of personal liability can hinder a company’s ability to recruit new officers and directors. The company can quell those fears by purchasing directors and officers liability coverage. A corporation is vicariously liable for negligent acts or errors committed by directors and officers while performing their duties on the corporation’s behalf.

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