What Is Directors and Officers Insurance?

Your organization’s leaders need to feel free to make challenging decisions that benefit the organization. Unfortunately, in some cases, tough decisions can expose leaders to personal exposure for their actions. That’s where insurance comes in.

Most business and umbrella liability coverage applies to the organization. In contrast, Directors & Officers insurance (D&O) applies to personal liability that may attach to board members or senior-level leaders due to their actions with the organization, including:

  • Financial mismanagement
  • Misappropriation of funds
  • Negligence
  • Personal misconduct
  • Failing to act in the organization’s best interest

D&O policies cover legal costs and the costs of a settlement or judgment. They generally will not cover fines, taxes, lost wages, or multiplied damages due to violation of state statutes.

D&O insurance differs from Errors & Omissions insurance, although the two are frequently confused. E&O coverage concerns liabilities due to the failure of a product or service, while D&O insurance relates to the actions of executives and board members.

For more information on commercial insurance and D&O insurance in the Palm Desert area, contact Desert Empire Insurance.