The business world is incredibly complex – and aspiring entrepreneurs are looking for a way to shape their industries and impact thousands through their offers and products. Naturally, this process comes with some pretty big decisions that boost the risks associated with your business. Directors and Officers Liability Insurance policies are designed to help offset these risks while protecting the interests of the business, done in a single convenient package price per month.
Below, we’re exploring what Directors and Officers Liability Insurance is, what it covers and when you should consider exploring these types of policies for your business.
What is Directors and Officers Liability insurance?
This specialty type of insurance covers C-suite executives and business owners and is designed to minimize the risks that come with large-scale business decisions. Often the more impact a decision has, the higher risk level it carries. It keeps litigation simple if a business is sued, isolating the claims and minimizing the risks of personal losses across the higher branches of your business. The coverage and peace of mind you can get are invaluable – making D & O insurance policies a great investment into your business’ longevity.
What does D & O insurance cover?
These types of policies cover charges associated with settlements or suits that stem from poor business decisions. There are a few caveats, however: the decisions must not have been criminal in nature, nor made for direct benefit of the owner or any members of the executive team.
Legal defense fees are generally covered by Directors and Officers Liability policies, although you should review the details of your specific plan before proceeding.
There are also several different types and variations of coverage, meaning that businesses do not necessarily have to afford indemnification-related charges (i.e. Side A of D & O policy coverage).
When should I consider getting Directors and Officers Liability Insurance for my business?
As your business expands, so do your liabilities. Small business owners should consider getting Directors and Officers Liability Insurance after the first expansion or after there is third-party involvement in their business for maximum protection. This can occur in the form of:
- First, second or third round investment opportunities
- Partners
- Formal board formation
Considering launching your business?
No matter what size of enterprise you’re involved with, D & O insurance is vital to protect your interests and assets in the event of litigation. If you’re considering launching your business or want to consider securing a business that’s currently in operation, we encourage you to reach out to our team. The experts at SentryWest are committed to helping you find success in your business’ security. For more information and to assemble a personalized protection plan today, please give us a call at 801.272.8468.