What a Business Should Consider When Acquiring D&O Insurance

D&O insurance protects the directors and officers of a business from the damaging effects of a lawsuit. It is an invaluable form of coverage for businesses to acquire, but there are some issues they should keep in mind when working with an insurance company. This helps the process run smoothly and prevents problems from arising.


What to Discuss With the Insurance Company


When an executive is shopping for a policy, he or she should discuss a few questions with the insurance agent:


  • Should coverage be limited to directors and officers or include the entirety of theĀ  business?
  • Will the policy cover innocent directors if one member is found guilty of wrongdoing?
  • Should additional coverage be acquired?


These are all concerns that a business should consider when working with an insurance company. Without making the proper deliberations, a business may obtain an inadequate form of coverage, which could render it unable to handle the possibility of a lawsuit.


The Importance of Buying Coverage


Of course, it is better to have some form of D&O insurance rather than none at all. Many businesses do not think that they need it, and it is only when they receive a claim that they understand the importance of having coverage. It is essential for businesses to have such a revelation before a claim is filed, as this could save them from significant financial suffering.