With today’s emphasis on corporate transparency and accountability, an organization’s directors and officers face a countless number of exposures.
Regardless of your company’s size or mission, the legal costs associated with a lawsuit can be crippling for both the organization and your directors and officers.
Many wrongly assume that directors and officers (D&O) insurance is only necessary for publicly traded companies.. However, privately held organizations can just as easily fall victim to lawsuits that can impact the company, its officers and board, making D&O insurance a must. Specifically, D&O insurance can provide the following benefits to privately held companies:
- Legal cost reimbursement: In the event of a claim, D&O policies can provide legal cost coverage for a variety of claims. Specifically, D&O insurance can provide reimbursement to leaders of private companies following allegations of wrongful acts, financial mismanagement, errors in judgment, and negligence. Since D&O lawsuits can occur without warning and easily reach six figures, it is critical that private company leaders arm themselves with the right policy.
- Peace of mind: D&O claims can come form a variety of sources, including employees, clients, contractors, and government bodies. For private companies, claims from creditors and competitors are particularly common. D&O insurance ensures that private company leaders are protected regardless of where claims originate– thus, providing timely and effective coverage.
- An improved ability to attract new directors: Simply put, having a strong D&O policy in place makes board seats more attractive. This is because purchasing insurance shows prospective leaders that you take D&O risks seriously and are prepared to protect them in the event of a claim.
- Coverage for regulatory exposures: Regulatory agencies are increasing their scrutiny of private companies, making D&O insurance all the more important. Paying the cost of an attorney to defend a director or officer against a government enforcement action is expensive, and private company D&O insurance policies can help with these types of expenses.
Want to learn more about D&O Insurance for Private Companies?
Many private organizations don’t believe they need D&O insurance. This can be dangerous thinking, as just one D&O claim can drain the personal assets of a company’s leadership team. To learn more about D&O insurance, contact us today 800-668-1653 or visit http://www.stoneridgeinsurance.ca/get-a-quote.
We’ve got you covered, and we guarantee Rock Solid Protection.