Directors and Officers (D&O) insurance is a type of liability insurance for losses suffered as a result of the actions of a business’s board of directors and executives.
Directors and officers owe a duty of care to the company’s shareholders, customers and employees, members or donors. When they breach that duty of care, usually by failing to exercise reasonable care when making decisions, a D&O policy will cover the resulting damages.
D&O policies are payable to either the directors and officers themselves, or directly to the company. This type of insurance has the potential to cover a wide variety of claims brought against a business for the actions of its directors and officers.
Do you have a claims made or occurrence based policy. Be careful when switching between types of policies. You may need tail coverage!