The directors and officers who make the tough decisions and keep the company running are also the employees most at risk if they fail in their duties. Even wen you know you have the best personnel, it is still important to purchase D and O coverage for these top three reasons.
Covers Defense Costs
Because the stakes are so high with responsibilities that include large sums of money and overseeing major transactions, employees at the top can be the target of lawsuits. Regardless of the merits of the case, your company will need to provide defense, and Directors and Officers coverage can handle the expense.
Protects Personal Assets
A company’s top executives can be personally liable for any duties breached that cause harm, such as bad investments jeopardizing retirement funds or improper money disbursement. Unfortunately, the employee’s personal assets are at risk unless your company provides D and O coverage.
Attracts Top Talent
You already know how hard it is to attract the best talent, but offering your top tier employees protection from significant financial harm is another benefit to tout. You hope to never have to use it by hiring the right people, but both employer and employee can agree that, like all insurance, it is necessary just in case.
In a perfect world, directors and officers in every company would do exactly what is expected and required of them without incident. However, the real world requires purchasing D and O coverage to make sure you’re protected for the unexpected.