Protection from Alleged Financial Loss

D&O Insurance

D & O policies insure corporate directors and officers against claims, most often by stockholders and employees, alleging financial loss arising from mismanagement. The policies contain two coverages: the first reimburses the insured organization when it is legally obligated (typically by corporate charter or state statute) to indemnify corporate directors and officers for their acts. The second provides direct coverage to directors and officers when the organization is not legally obligated to indemnify themselves. In addition, a third type of coverage, known as entity securities liability insurance, is usually available on an optional basis for additional premium. Such coverage insures the corporate organization in connection with securities it has issued. D & O forms are written on a claims-made basis, generally contain no explicit duty to defend the insured’s and typically exclude intentional/dishonest acts and bodily injury and property damage.