Directors and Officers Liability
Private Companies
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Directors and officers at privately held corporations can be sued for a variety of types of actions, but most privately held corporations do not realize the need for D&O insurance until a claim is brought and lawyers are involved.
The most obvious source of suits is shareholders who claim the actions of some or all of the officers and directors have damaged them. The non-shareholder related claims that privately held companies are exposed to compose the majority of all claims filed. These exposures include employee, client, competitor, and government related lawsuits. One analysis showed the following source of D&O claims:
| Shareholders | 20 % |
| Employment | 15 % |
| Contract | 30 % |
| Primary Business or Product | 15 % |
| Unfair Competition & Trade Secrets | 10 % |
Many privately held corporations have failed to secure the necessary protection afforded under a Directors & Officers Liability policy. This failure may require significant financial and personnel resources to settle and defend lawsuits that could have been covered by affordable Directors & Officers Liability Insurance.
Why Buy D&O?
Directors and officers of private companies have a variety of exposures, and defending a claim can be expensive. Some of the reasons for using D&O insurance as protection can include:
- Quality directors will not serve without D&O coverage
- The personal assets of directors and officers are at risk
- The cost of defending a corporate lawsuit can be high
- Judgments can be financially crippling
- Corporate indemnification is not be available for certain types of claims
- Bad business decisions can be more visible for a small business
- Shareholders are not the only exposure; other potential claimants are:
- Customers
- Regulators
- Employees
- Creditors
- Suppliers
- Activists
- Competitors
- Unique conflicts of interest may exist due to complexity of responsibilities
Claim examples can be found on the Claim Examples page.
- Get D&O Insurance
- On-Line Quoting Capabilities
- Directors & Officers Have Duties
- D&O Coverage - Privately Held Corporations
- The D&O Market
- D&O Account Examples
- D&O Claims Happen - Examples
- Other D&O Topics
- Protecting Ds & Os Personal Assets
- Tougher & Unusual Accounts
- Side A Excess - Call!
- Private Companies Going Public - Call!
- Combining D&O & EPL
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