In today’s business world, lawsuits are not uncommon. Employees file suits for wrongful termination, unfair business practices, and harassment. A company should have insurance to protect its management in the event of this type of litigation.
Management Liability Insurance
To protect its management in the case of a lawsuit, a company needs management liability insurance. This type of policy includes several types of coverage for different types of legal action. One of the main things you need to know is fiduciary insurance vs D&O insurance.
Fiduciary insurance protects your company in the case that your provider makes an error in the management of employees’ stock options or 401(k)s. Without coverage, your personal assets could be at risk if an employee sues.
A company’s directors and officers can be at risk of a lawsuit brought by investors, competitors, or shareholders due to the committing of a wrongful act in the tasks of managing. Such an action could result in a loss of personal assets for a member of management. A D&O policy provides coverage that will protect the assets of directors and officers.
Every company, no matter how small, should be insured to protect its assets and those of its managers from potential lawsuits. Fiduciary and D&O insurance are two essential types of coverage.