The Advantages of Director & Officers Insurance for Your Company
When running a company, there are a lot of more and less important aspects to consider. But when it comes to those that can affect your business and your employees' life, you cannot overlook the importance of directors & officers insurance. Regardless of the size of your company, the legal costs coming from a lawsuit can be crippling for both, your directors and officers and your business in general. This type of insurance provides coverage to your board of directors and officers in a case of lawsuits and allegations against them while they are performing their roles in your company. This insurance is for the benefit of your leadership team providing them protection in case they are accused of making management errors.
Legal cost reimbursement
This insurance can also be beneficial for your bank account. Director and officers police can cover the costs for different claims. Specifically, directors & officers insurance can provide payment to owners of the company following an allegation of financial mismanagement, wrongful acts, errors in judgement and negligence. Director and officers lawsuit can happen anytime without warning so it is crucial to arm the leaders of your company with the right policy.
Ability to attract new directors
Simply said, having the right and strong D&O liability insurance policy will make your board more attractive for other directors to want to join in. Showing that you are taking directors and officers risk very seriously and that you are ready to protect them in case of a claim creates a very positive image for your company.
Peace of mind
There is no time and place when D&O claims can happen. They can literally come from anywhere including clients, other employees in your company, government bodies and contractors. For private businesses, the most common claims are once coming from competitors and creditors. If you already have D&O liability insurance you can be a peace of mind knowing your company's leaders are protected providing them with effective and timely coverage regardless of where claims are coming.
Coverage for regulatory exposures
With the increased inspections from the regulatory agencies, owning a D&O policy for the leaders of your company is more than a good investment. Playing the cost to defend an officer or a director against a government enforcement action can cost you a fortune. Fortunately, when you already have a director and officer insurance policy everything becomes less expensive.
There are a lot of companies that underestimate the importance and need for D&O insurance. The truth is if you do not want to switch from an owner of a profitable company to one who cannot cover the expenses of its leadership team, you should seriously consider D&O liability insurance.
