Directors & Officers Insurance

Directors & Officers Insurance Coverage

Directors and Officers Insurance (also known as D&O Insurance) provides coverage for members of boards of directors against wrongful acts. These wrongful acts might include actual or alleged errors, omissions, misleading statements, and neglect or breach of duty on the part of a member of a board of directors.

The D&O insurance policy will provide the resources and expertise to defend the board and individual members against the allegation. Defence costs are sometimes included as part of the overall policy limit so knowing the total limit and purchasing what is required is important. We will help you get the insurance policy you require.

Did you know that if you are volunteering your time as a Board Member for a not-for-profit organization, your Board should carry Directors & Officers Liability Insurance? If you have a question about D&O insurance, give us a call to speak directly with a  Directors and Officers Liability Insurance specialist.

What Is Directors & Officers Insurance?

Directors and Officers insurance is a type of liability coverage for defence costs and damages arising from wrongful act allegations and lawsuits brought against an organization’s board of directors and officers.

Who Needs Directors & Officers Insurance?

All businesses and organizations, whether profit or not-for-profit, should have Directors and Officers insurance to properly protect its board members, directors and officers from legal liability.

What Does Directors and Officers Insurance Not Cover?

D&O insurance does have various exclusions and does not cover criminal acts, losses due to pollution, breach of fiduciary duties, giving of unprofessional advice, or employment discrimination issues to name a few. However, some policies may include this and, if not, coverage may be purchased for employment practice liability insurance or fiduciary liability insurance.

Duties of Directors Information

There are three basic duties of directors: 1) they have a duty of care – to act reasonably, in good faith and in the best interest of the organization 2) they have a duty of loyalty – to put the interest of the organization before their own and 3) they have a duty of obedience – to act within the scope of the organization and within their rules and laws.

Claims Made Information

Most directors and officers insurance policies are written on a “Claims-Made” basis which means that any claim must be made and/or reported within the policy period in which it occurred.  These policies have retroactive dates – a date previous to the policy’s effective date where the alleged claim can be considered.  The retroactive date is important as claims that arise out of an act prior to this retroactive date will not be covered by the policy.

Insured Persons In A D&O Insurance Policy

Most Directors and Officers Liability policies have a broad definition of who is covered under the policy and this typically includes any individual who is acting as a director, officer, trustee, employee, and volunteer, including the estates, heirs, and legal representatives of any said deceased or insolvent individuals.

For more information on Directors & Officers Insurance, contact our brokers at Morison Insurance. Call us today or click below to get an online quote.

This content is written by our Morison Insurance team. It is provided for general information only. Insurance needs differ from person to person, and this article is therefore not a substitute for professional advice about your individual insurance needs which can be obtained by speaking to one of our brokers.