Directors and officers insurance is a specialized type of coverage that is designed to shield people in these positions against claims of wrongful professional conduct. Surprisingly, a number of organizations with acting directors and officers may fail to take out this insurance, viewing it as too narrow or unlikely to be used. However, the following benefits make this coverage well worth securing.
Protecting Directors and Officers
Directors and officers insurance shields these individuals from losing their personal assets in the event of claims. This protection is essential for most directors and officers, since the cost of claims can significantly exceed the value of a professionalUs income and personal assets. This coverage is just as important for professionals with sizable assets as it is for professionals who serve voluntarily and have fewer assets to risk.
In organizations that lack this insurance, directors and officers may be understandably reluctant to seize sudden business opportunities or make decisions that are anything but conservative. Some organizations may even have trouble filling open director or officer positions. This coverage ensures that professionals can serve as directors and officers and act to the best of their abilities without constantly worrying about potential claims.
Finding the Right Fit
In light of these factors, most organizations with directors and officers can benefit from taking out specialized insurance coverage. While directors and officers insurance coverage may occasionally overlap with other forms of coverage, in most cases, it offers a distinct form of protection. This makes this type of coverage an essential policy addition for most organizations.