Directors & Officers Insurance, or D&O insurance, is a type of liability insurance that provides financial protection for the personal assets of company directors and officers in the event they are sued for alleged wrongful acts while managing the organization.
One key aspect of Directors & Officers Insurance is its ability to cover legal fees, settlements, and other costs incurred during lawsuits related to decisions made by directors and officers in their managerial roles.
D&O insurance is essential for both private and public companies to ensure comprehensive protection for their leadership against the increasing risks and potential legal challenges they may face.
This coverage directly protects individual directors and officers when the company is unable to indemnify them. It ensures that personal assets are safeguarded in case the organization cannot provide reimbursement for legal expenses incurred during lawsuits.
Side B coverage reimburses the company for expenses it incurs while indemnifying directors and officers in legal proceedings. This coverage helps companies fulfill their obligation to protect their leadership team without facing financial strain.
Also known as entity coverage, Side C coverage safeguards the company itself against securities claims. It protects the organization’s financial interests by covering costs related to legal defense, settlements, and judgments arising from alleged wrongful acts.
