Directors & Officers (D&O) Liability Insurance protects those in leadership roles from financial loss if they face lawsuits from employees, suppliers, clients, or third parties. This coverage includes defense costs, settlements, and expenses related to wrongful acts, allegations, and legal actions. D&O insurance is a vital corporate risk management strategy component and helps attract and retain skilled executives and board members.

Lawsuits against directors and officials frequently arise for the following reasons:

• Financial loss or insolvency as a result of a fiduciary obligation breach
• Misrepresenting the assets of the company
• misuse of corporate funds
• phoniness
• Failure to adhere to workplace regulations
• Intellectual property theft
• stealing customers from competitors
• Inadequate corporate oversight

Side A Coverage
Protects directors and officers for defense costs, settlements, or judgments if the company cannot reimburse them, such as in cases of bankruptcy.

Side B Coverage
Covers the company for losses incurred by directors, officers, and employees when the company repays them.

Side C Coverage
Also known as "entity coverage," this protection financially secures the corporation. However, entity coverage may reduce the limits available to protect individual officers and directors.

The necessity of having comprehensive D&O insurance cannot be overstated. It's a common misunderstanding that other liability policies, such as general commercial liability, errors, omissions, or professional liability, cover misconduct allegations by directors or companies. This is often not the case.

• Misconduct may not be covered under the organization's indemnification clause.
• Even if indemnification is possible, the organization may need more funds to cover the ongoing expenses of a lawsuit.
• Legal costs can quickly escalate to six figures or more.

With the financial support of a D&O insurance policy, indemnification clauses may sufficiently protect the organization's directors and officers.

Contact us today to stay ahead of the complex risk landscape and secure the best D&O insurance coverage. Parson Insurance Agency is dedicated to providing comprehensive protection for your company's leadership in Ohio.