Benefits Of D&O Insurance
For Private Companies
ith today’s emphasis on
and accountability, an
and officers face a
countless number of exposures. Regardless
of your company’s size or mission, the
legal costs associated with a lawsuit can
be crippling for both the organization and
your directors and officers.
Many wrongly assume that directors and
officers (D&O) insurance is only necessary
for publicly traded companies. However,
privately held organizations can just as
easily fall victim to lawsuits that can
impact the company, its officers and board,
making D&O insurance a must. Specifically,
D&O insurance can provide the following
benefits to privately held companies:
LEGAL COST REIMBURSEMENT.
In the event of a claim, D&O policies can
provide legal cost coverage for a variety
of claims. Specifically, D&O insurance
can provide reimbursement to leaders of
private companies following allegations
of wrongful acts, financial management,
errors in judgment and negligence. Because
D&O lawsuits can occur without warning
and easily reach six figures, it’s critical that
private company leaders arm themselves
with the right policy.
PEACE OF MIND.
D&O claims can come from a variety of
sources, including employees, clients,
contractors and government bodies. For
private companies, claims from creditors
and competitors are particularly common.
D&O insurance ensures that private
company leaders are protected regardless
of where claims originate, providing timely
and effective coverage.
AN IMPROVED ABILITY TO ATTRACT
Simply put, having a strong D&O policy
in place makes board seats more attractive.
This is because purchasing insurance
shows prospective leaders that you take
D&O risk seriously and are prepared to
protect them in the event of a claim.
COVERAGE FOR REGULATORY
Regulatory agencies are increasing their
scrutiny of private companies, making
D&O insurance all the more important.
Paying the cost of an attorney to defend
a director or officer against a government
enforcement action is expensive, and
private company D&O insurance policies
can help with these types of expenses.
Want to learn more about D&O insurance
for private companies?
Many private organizations don’t believe
they need D&O insurance. This can be
dangerous thinking, as just one D&O
claim can drain the personal assets of a
company’s leadership team. To learn more
about D&O insurance, contact us. +