Other Business Solutions
What is Directors and Officers Liability Insurance?
What does Directors and Officers Liability cover?
How important is Directors and Officers Liability Insurance?
Who needs Directors and Officers Liability Insurance?
While there is no specific type of business that must have a D&O policy, businesses concern the following aspects should take high consideration in taking out a D&O policy:
- Any business that has large sums of money owed to creditors are susceptible to liquidation. When there is an inability to pay creditors, the blame is often pointed towards the company’s directors and officers.
- Any company who intends to hire a top executive can use this policy as an attraction. Some executives will not even consider joining a company without this coverage.
- An organization with a board of directors, whether it is private, public or non-profits, will find a D&O policy beneficial.
- If you are looking to secure investors from venture capital firms.
How much does a Directors and Officers Liability Insurance policy cost?
The cost of a D&O policy depends on multiple factors:
- Legal History
Typically, a business that has been established for longer, with an experienced group of leaders can expect to pay less due to lower risks of litigation. Furthermore, the more assets, income and shareholders results in higher rates. Insurers will also look at financial stability, as low risk of bankruptcy can lower the cost. Lastly, the higher the coverage, the more it costs.