Is your organization and board of directors protected from liability and risk? If your private, public, or non-profit company has a board of directors, you need to protect it. Directors face many risks and liabilities due to their visibility and the nature of their role. This can lead to liability claims, lawsuits, and other actions resulting in financial loss.
Directors and officers liability insurance coverage gives you an added layer of protection. At ThinkInsure, our Ontario business insurance experts can help you protect your organization and board of directors. Get protection from lawsuits, liability, and other common risks. Below you will learn about :
Directors and officers insurance (D&O insurance) is a form of liability insurance. It is specifically for board members, directors, and officers. It provides coverage for legal defense costs and damages awarded as a result of alleged wrongful acts claims.
Policies are available for private firms, publicly traded companies, non-profits, and educational institutions.
D&O liability coverage can help organizations manage the costs associated with errors, negligent actions, and liability lawsuits.
There are three main types of D&O insurance coverage available to organizations :
Directors and officers in non-profits share similar roles and responsibilities as other organizations. With fewer resources than corporations, it’s important to have D&O insurance to protect organization board members. Coverage also helps recruit top talent to work in director and officer roles for your non-profit in Canada.
Public companies are open to scrutiny. Now more than even, companies and their key decision makers are accountable for their actions.
D&O insurance policies ensure your organization has access to legal counsel. You have coverage if directors and officers are found liable of erroneous acts, bylaw violations, and errors. You will have coverage for legal fees and representation, providing your company with financial protection.
Private companies need D&O liability coverage too. You may not have the same disclosure as public companies. But your directors and company leaders still have exposure to liability risks. This includes breach of duty, conflict of interest, and misleading business partners, customers, and stakeholders. Company and personal assets of directors can get protection with this coverage.
Companies have the option to choose between coverage subtypes, or sides :
Serving as a board member, director or officer comes with expectations you will act in good faith. You need to act in the best interests of the organization. Directors and officers are accountable for their actions. Failure to be diligent, loyal, and obedient to company rules could expose organizations to many liabilities and risk. They include :
Here is what you can expect to be included in your D&O policy :
Directors and officers coverage is necessary for a number of important reasons :
Directors and officers insurance cover a range or organizational risks :
D&O insurance doesn’t cover criminal acts, bodily injury, property damage, fraud, illegal compensation, or prior litigation. When choosing a policy, make sure you are aware of exclusions and obtain other coverage to mitigate those risks.
Any professional who serves as a board member, has a director or leadership role in an organization needs coverage. If you hold one of these positions you should seriously consider directors and officers liability insurance. Coverage may not be available through your organizations. Individuals should still get coverage to protect themselves and personal assets.
The cost of your premium depends on your company size, type, and perceived risk. For example, lower risk businesses can pay as little as $400 per year for $1 million in coverage. Larger companies with greater risk can pay more than $10,000 per year for coverage.
As a general rule, premiums increase as companies become larger and have greater risk exposure. Small business is lower risk and publicly traded companies are higher risk.
Protecting your company’s interests is paramount. Our business insurance experts will help you reduce risk and choose the right D&O insurance policy. Experience the ThinkInsure advantage :
Directors and officers of non-profit organizations have similar exposure to liability risks as professionals in other organizations. An oversight or mistake could result in damages greater than your net worth. This is a significant risk if you don’t have D&O coverage.
Today, an increasing number of non-profits and those in director positions are being sued for their decisions. Standard business liability insurance will not cover you for legal protection of this nature.
Depending on your policy type and coverage, your policy will provide protection for :
Learn more about the importance of directors and officers insurance for your organization. Check out these common questions:
D&O is not mandatory. Coverage is recommended if you are a non-profit or if you have a board of directors.
No. D&O coverage is not part of standard business insurance policies. You will need to add it to your policy.
The cost of directors and officers insurance varies by insurance provider. Many factors impact the cost of your premiums. This includes coverage needs and limits, business types and size, age, financial stability, number of employees. Getting a quote is the most effective way to determine how much D&O coverage will cost.
Yes, all insurance policies have limits. Coverage limits vary based on your company size, risk factors, and other considerations. Always reassess your policy limits when you renew your coverage each year.
No two companies have the same insurance needs. Getting the best D&O coverage for your organization involves understanding your risk exposure. Know the types of coverage that will protect you against lawsuits and damage claims. Work with an insurance broker to make sure you have the right coverage and explore your options.
Coverage limits vary based on the size and type of company. The amount of coverage you need increases with your level of risk, number of employees and other factors. Speak with a business insurance expert about your needs and options.
While any company can purchase D&O insurance, some industries tend to include it in their policy more frequently. This includes construction, manufacturing, transportation, communications, retail, finance, public administration, and service based companies.
More and more lawsuits against directors and non-profits are happening. A directors and officers policy gives you peace of mind in knowing you have coverage if you are sued.
There is one main difference between D&O and E&O policies. It’s the type of actions that are part of your coverage. E&O offers coverage for products and services. D&O offers coverage for management and leadership decisions.
Our business insurance experts can help you with all your insurance needs, including D&O insurance quotes. We’ll find you the right policy to match your business size, type, industry, and risk profile. Get the best rates and save while protecting your business. Get the peace of mind you want and need.