Comprehensive Financial Solutions, Inc.

440-343-4223

Insurance Read Time: 2 min

Directors and Officers Liability Insurance

Liability insurance for directors and officers is not just for large public companies; it can be an equally valuable risk management tool for smaller businesses.

Directors and Officers (D&O) liability insurance helps protect directors and officers of public and private for-profit businesses of all sizes, as well as non-profit organizations, and educational institutions.

A D&O insurance policy provides financial protection for managers against claims arising from actual or alleged “wrongful acts” of directors and officers acting within the scope of their managerial duties. A D&O policy is designed to pay for defense costs and financial losses. It may also cover the costs associated with administrative and criminal proceedings and with investigations by regulators or criminal prosecutors.

D&O insurance is not designed to cover certain risks, such as those attached to fraud, intentionally bad acts, illegal remuneration, property damage and bodily harm, and pre-existing legal actions.

Primary D&O Risks

The risks confronting directors and officers are manifold, and may include:

  • Employment practices and other human-resource-related issues
  • Shareholder actions
  • Reporting errors
  • Inaccurate and inadequate disclosure
  • Failure to comply with laws or regulations
  • Decisions that exceed the authority of a company officer

D&O insurance is not just about protecting directors and officers against the financial risks that may arise from the decisions they make. A key benefit of having such protection is that it provides company officers and members of a company board with the room to make decisions with the knowledge that the risks attached are manageable and transparent.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Related Content

Perception vs. Reality

Perception vs. Reality

There’s an alarming difference between perception and reality for current and future retirees.

Stay Safe with a B.O.P. At Your Back

Stay Safe with a B.O.P. At Your Back

Learn about the advantages of Business Owner Policies with this highly educational and fun animated video.

When Heirs are Imperfect

When Heirs are Imperfect

The money problems or bad lifestyle habits of adult children could lead to the squandering of any inheritance they receive.

 

Have A Question About This Topic?







Thank you! Oops!

Do Your Kids Know The Value of a Silver Spoon?

You taught them how to read and how to ride a bike, but have you taught your children how to manage money?

Insuring Your Business Against Cyber Liability

90% of small businesses in the U.S. don't protect their data from cyber attacks. Is your business at risk?

Problems with Probate

Probate can be a completely public process, or it can be managed to include as little information as possible.

View all articles

Federal Income Tax

Use this calculator to estimate your income tax liability along with average and marginal tax rates.

Historical Inflation

This calculator shows how inflation over the years has impacted purchasing power.

What's My Potential Estate Tax?

This calculator helps estimate your federal estate tax liability.

View all calculators

Long-Term-Care Protection Strategies

The chances of needing long-term care, its cost, and strategies for covering that cost.

Your Cash Flow Statement

A presentation about managing money: using it, saving it, and even getting credit.

Managing Your Lifestyle

Using smart management to get more of what you want and free up assets to invest.

View all presentations

Inflation and Your Portfolio

Even low inflation rates can pose a threat to investment returns.

Should You Invest in Exchange Traded Funds?

There are thousands of ETFs available. Should you invest in them?

Emerging Market Opportunities

What are your options for investing in emerging markets?

View all videos