Caring for your employees is essential to running a highly-successful business and maintaining morale in the company. As a business owner, protecting your employees should be a top priority. One of the biggest things many overlook is the importance of D&O insurance, or directors and officers coverage. It is a liability policy that benefits companies with executives and board members.
Taking Care of Your Employees: Best Insurance to Use
Understanding the protections this type of insurance offers for your company can make all the difference if your company faces a scandal.
Understanding The Basics Of D&O Coverage
D&O coverage is targeted insurance coverage for executives and upper-level management of any business. These roles are the highest in authority, and any decisions or actions from these individuals can significantly affect the company’s financial standing and position in the industry.
How Directors and Officers Liability Insurance Can Assist
When you secure D&O coverage for your executives, that policy will address losses associated with misleading statements, wrongful actions, discrimination, and mishandling of business funds. It can also provide protection when there are questions of irregular employment practices, questionable accounting, and even environmental damages. If any member of your executive board or senior management face accusations like this, D&O coverage can help protect your business finances. It won’t, however, protect against deliberate criminal behaviors.
The Benefits of D&O Coverage
What does D&O insurance cover? There are various ways your
policy can protect your business. There are three different coverage lines to this type of policy.
Coverage A
The line of coverage protects your executive’s personal assets if they face a lawsuit. This coverage is targeted directly to each executive in case of any misjudgment or interpreted error leading to legal action. Thus, the insurance company will ask for legal representation and any settlements. This coverage addresses situations where the executive faces liability exposure that doesn’t extend to the business.
Coverage B
D&O insurance also extends to the company if the insured executive loses a claim. The D&O policy will cover any liability the company is responsible for paying in this situation.
Coverage C
This coverage targets the company’s liability if someone files a claim
against both the executive and the company. Any settlements or punitive damages assessed to the business will fall under this line of your D&O coverage.
Even the most regimented business operation can be at risk of liability exposure, whether it’s an oversight by senior management or a poor judgment call. You need D&O insurance to protect your business and your executive team. Additionally, the right policy can ensure that your company’s assets and executives aren’t vulnerable in a litigious situation. Your commercial agent can assist you in determining the right coverage option for your risk levels.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.
