DIRECTORS AND OFFICERS INSURANCE

The directors and officers working with large organizations or corporations and other non-profit organizations are always at the risk of facing lawsuits being filed against them. The main reason as to why these directors and officers are at such a great risk is that the investors can anytime hold them accountable for the poor financial outcomes. As a result to this risk, the directors and officers liability insurance cover has become one of the standard components of the insurances bought by most of the organizations with shareholders.

There can be many other facets to this liability Directors Insurance cover for the directors and officers. In easy words, we can say that the Directors Officers Insurance cover offers them protection against not only the lawsuits but covers the legal fees too. There are also the provisions for the protection against the security claims and even the claims made by the employees.

DIRECTORS AND OFFICERS INSURANCE

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.

WHAT DOES DIRECTORS AND OFFICERS INSURANCE COVERS

The Directors and Officers Insurance generally cover the employment practices liabilities that form a large part of these policies and mostly covers discrimination and harassment claims. If any employee decides to file a case the director or the officer of a company for harassing them regarding work or discriminating between seniors or juniors, men or women or regarding any other thing in the office, the director can be held liable to pay a huge amount of money as a claim. This insurance policy also covers the legislative breaches like the companies acts, data protection act, insolvency act, health and safety act etc.

This cover also protects the directors and officers against any disputes that may arise from any kind of acquisitions and merger activities and any alleged mismanagement regarding the financial matters of the company. Also it gives them cover in case they act contrary to their company’s memorandum articles of association and even in cases where the director or the officer has made any slanderous statement. These are just the few situations where the Directors Insurance may prove to be very helpful, however, there are many more situations where you can be covered, it is always a good idea to consult a good insurance agent and read all the inclusions and exclusions carefully before buying the insurance.