Directors and officer’s insurance covers the directors and other officers in a company in case someone accuses them of any fraud or wrongful acts while doing business. Anyone, including the customers, regulatory bodies, shareholders, creditors, even employees, auditors or suppliers may file a case against the directors and the officers of the company. If they have a directors officers insurance, they will be reimbursed all the money that they will spend on the lawsuit to defend themselves and also any claims money, if it was paid, according to the limit mentioned in the policy.
A lot of people who work as directors and officers in the companies think that they are in any case covered by their company, however, they need to know that a claimant may process a case against them personally too and the company will not stand liable in that case and they have to pay all the expenses out of their own pockets. So, it can be really beneficial to have a sufficient directors officers insurance to protect your interests and also protecting yourself from going bankrupt in case you need to pay a lot of money as a claim.
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