This insurance protects the directors and officers of a company in the event if they are sued for their actions or wrongdoing in connection with a company business. If any business depends on board of directors and officers then that business needs this insurance. Generally, protection is provided by this insurance for claims which are caused by the errors in judgment.
Generally, directors and officers insurance provide coverage for criminal, administrative, civil and regulatory proceedings based on actual or alleged acts, errors, omissions, misstatements, neglect, or breach of duty committed or allegedly committed by a director or officer.
There is a limit in protection of policy of directors and officers insurance. Generally, this insurance is purchased by the company. Some form of coverage is required by the people in these positions to get protection from claims initiated by share holders, customers, regulators, employees and competitors and company itself.
There are some things that are needed to be known to find whether this policy works for you and your business.
Coverage of policy is extended by some of the directors and officers insurance providers to include directors and officers and company as well. Insurance company reduce the officer’s coverage to adjust the business’s general liability, if the company and it’s officers are named in the lawsuit.
A business owner provides coverage for himself, directors, officers, if he has directors and officers insurance policy which contains a shared liability clause.
This directors and officers insurance policy protects the directors and officers and company as well from claims which are caused from employees, clients, share holder, others.