Tag Archives: professional liability coverage

D&O Insurance: Important Protection for Important People

The most common misconception about Directors and Officers (D&O) insurance is that this coverage is only a necessity for large, publicly traded companies. Smaller companies with fewer shareholders may think their exposure to these types of claims may be minimal or nonexistent; however, private companies can face “professional liability” claims from several sources: employees, investors, creditors, customers, competitors, and government agencies just to name a few. The cost alone of defending such claims can sometimes be enough to cripple a business, with settlements and payouts being even more financially devastating.

D&O Insurance Defined:

Directors and Officers insurance is a type of liability insurance (payable to the directors and officers of a company or the organization itself), which covers these individuals/companies for claims made against them while serving as an officer of the company or on the board of directors for any alleged wrongful acts in their capacity as directors or officers.

What are some of the top reasons for private companies to carry D&O insurance?

    • Employment Practices Liability. Claims of workplace discrimination, sexual harassment, and wrongful dismissal can happen regardless of a company’s size or stature. These situations can be even more pronounced in smaller companies with a more hands-on management team.
    • Peace of mind when taking on investors. Those investing in a business expect to eventually see a return on their investment. However, if a business ends up failing and investors lose their money, they will look to recover it by way of legal action against top executives.
    • Personal asset protection. Directors and officers of private companies may have a fair bit of their own money and assets invested into their company, which can subsequently get dragged into defense costs, settlements, and judgements if found liable for any wrongful acts while operating in their duties.
    • Legal expenses. Companies can still get drawn into litigation even if claims of alleged wrongful D&O acts are groundless, and the costs to defend such unfounded claims can add up quickly.
    • It is now more affordable than ever. The market for D&O insurance has grown substantially over the past decade, with most insurance providers offering some form of coverage. Depending on the size of your company, D&O insurance premiums may only represent a small additional cost in proportion to the rest of your insurance coverage.


Perhaps most importantly, having a sound D&O insurance program in place offers peace of mind to management, allowing them to better focus their efforts on other important areas such as business growth and smooth operations. Getting a quote is easy – speak to one of our commercial insurance experts today about what options make sense for your business.


Protecting Your Business with the Right Type of Insurance

Similar to the way you protect your car and home with insurance, the right type of insurance for your business can provide you with peace of mind in your personal and business life. To protect your assets and your business from potential risks, you should consider obtaining business insurance.

Business insurance can protect your new or growing business in a number of ways, including insurance for business property, earnings, and liability. Insurance policies can provide coverage in the event that a disaster or emergency destroys part or all of your business premises and/or assets, and can protect your business from the legal costs resulting from a lawsuit for personal injury or property damages. Some of the most common types of business insurance coverage available today are Commercial General Liability (CGL), and professional liability coverage, known as Errors and Omissions.

Commercial General Liability protects your business if you are found legally liable for injuries or property damage caused by your product, completed work, or accidents on your premises involving visitors or customers.

Errors and Omissions coverage is designed to protect professional individuals and companies against claims for financial loss associated with negligence, malpractice, errors, and omissions resulting from their professional services.

Insurance needs can vary greatly which is why it’s best to get advice from a trusted broker like The Hull Group who is familiar with your specific type of business and can guide you towards the right protection. Contact us today to learn more about how you can protect your business with the right type of insurance.