All successful companies put significant consideration into how to protect themselves from general liability relating to their activities and operations. However, it’s equally important to evaluate protection for board directors and corporate officers who may face potentially significant liability in the event of a legal claim; claims can be made both jointly and severally against companies and their directors and officers. Here are some important considerations regarding executive liability that you should discuss at your next regular or annual directors’ meeting.
Do Your Current Insurance Policy Elections Adequately Protect Your Executives?
Officers and directors need to be aware that general liability insurance policies may not provide for company executive liability. While it may be possible to add new policy lines at any time, it’s advisable to review your elections with an experienced representative in advance of your next renewal period so that you can budget accordingly.
What Types of Businesses Need Directors and Officers Insurance?
Regardless of what type of business a company is engaged in, virtually every type of business entity will need to have insurance that protects its directors and officers. Nevertheless, nonprofit organizations, private healthcare corporations, as well as financial institutions need to be particularly conscientious about protecting executives because they rely heavily on board involvement as a core component of their corporate activities.