Directors and Officers Liability

If your business is incorporated, does it have a board of directors and corporate officers? Do you serve on a board of directors?

If the answer is “yes” to either question, you could be exposed to lawsuits from shareholders.  They may sue you, alleging that you have committed acts that reduced the corporation’s value.  Lawsuits may also arise out of employee practices, allegations of conflicting interests, and from providing information to the investing public. Decisions made by directors and officers impact the viability and value of a corporation.  The current issues of accounting practices, financial reporting, and the use of corporate assets have resulted in an increase of lawsuits being filed against executive boards.   Directors and Officers (D&O) coverage should be considered a necessity for corporate entities.   D&O coverage supplements the protection provided by general liability policies since the former responds to legal actions filed by shareholders, customers, scorned merge partners and creditors.