Your team’s day-to-day actions can land you and your business in the midst of a lawsuit with investors, shareholders, customers, creditors, and/or competitors.  Phoenix Insurance Group will help you evaluate how your day-to-day business activities could cause D&O exposure, enabling you to prepare in advance. Once you know the risks, it is easier to avoid them.

Can your business afford the risk of D&O exposures?

Directors and Officers Liability Insurance is often overlooked by businesses to their detriment.  D&O coverage protects the directors and officers of your business or organization if they are sued as a result of their responsibilities or duties related to that role.  Considering our increasingly litigious society, this insurance is becoming more and more valuable to businesses of all sizes.

Why Do Directors and Officers Need Insurance Protection?

Claims are made against businesses and directors all the time. Claims can be filed by stockholders, employees, clients, etc.  The law allows directors to be held directly responsible for acts of the company; therefore anytime someone sues the company, the directors can be added to the lawsuit as well.  Knowing this, few directors are willing to do business without this insurance coverage as it leaves their personal assets vulnerable to potential judgments.

The costs of trial alone can set a small firm, organization, or business on a path to bankruptcy and place larger businesses in an unfavorable financial position. For directors and board members it can easily spell financial doom.

Unfortunately, people do not necessarily even need a legitimate reason to file a lawsuit.  Many businesses feel that they are honest, and therefore safe, but that is unfortunately not always true.  Some of the most common accusations are as follows:

• Conflicts of Interest
• Self-Dealing
• Acting Outside of Authority
• Breach of Fiduciary Responsibilities
• Misrepresentation (during sale of company assets or in a private placement prospectus)
• Mismanagement of Company Assets
• Mismanagement of Operations
• Neglect
• Breach of Duty
• Misstatements

What Does Directors & Officers Liability Insurance Cover?

Directors and officers liability insurance offers insurance protection for not only the legal expenses associated with the trial, but also coverage to help pay settlements and judgments reached in the course of the trial. Of course, there can be variations in the amount of liability protection available to you as a result of specific policies you purchase so it is important to discuss the policy with your agent.

Who Purchases D&O Liability Coverage?

Any company that is publicly traded and has a corporate board or advisory committee needs this specialized type of coverage. Other businesses that should consider providing this coverage include non-profit organizations and private companies that have officers and directors on staff.

Phoenix Insurance Group is committed to sparing businesses and organizations like yours — and the board members and directors associated with your organization — the loss of assets that can arise as a result of legal expenses and judgments or settlements reached in any of the cases filed against you.

Call Phoenix Insurance Group today at 908-879-6500 to discuss your organization’s needs for directors and officers liability insurance coverage. We can put together a package that is uniquely designed for the needs of your directors and officers so that their assets aren’t left on the table once the case is decided.