Directors & Officers Insurance
Directors and Officers Insurance is not as well-known a coverage as some other commercial insurance policies. Directors and officers insurance, or D&O insurance, is designed to protect the directors and officers of a non-profit, for-profit, or a privately held business. If managerial decisions have resulted in adverse financial consequences, directors and officers may help protect certain individuals or the company as a whole from defence costs and damages.
The following industries may benefit from Directors and Officers Insurance:
Non-Profit Organizations
For-Profit Organizations
Privately-Held Companies
D&O insurance can take different forms, and the form you need may depend on the nature of your organization as well as the kinds of risks that you may face. It’s important to seek out a provider that specializes in directors and officers insurance to get the coverage that you need. Hitchings Insurance is happy to provide you with the insights you need, from a community-driven standpoint, to get you the protection that best preserves your peace of mind.
Depending on the size and nature of your business, D&O insurance is a must-have. Almost 25% of private companies have reported a D&O-related loss, of which over 90% were financially impacted. Small businesses are not immune to costly lawsuits, and small businesses are more likely to find themselves unable to recoup following a disaster due to a lack of financial resources. Request a directors and officers insurance quote for free with Hitchings Insurance.
What is Directors & Officers Insurance?
D&O insurance is designed to protect anyone serving as a director or officer for your company or organization from personal losses due to claims alleging they’ve deviated from their duties. Directors and officers insurance may be purchased as a separate policy or bundled in with other forms of liability insurance. It can include one or more different types of coverage: A-side coverage, B-side coverage, or C-side coverage.
A-side coverage covers the officers, directors, and even employees for legal costs if a company cannot indemnify them – such as in the event of bankruptcy.
B-side coverage covers the company’s officers’, directors’, and employees’ losses if a company does indemnify them.
Finally, C-side coverage, which is also referred to as “entity coverage,” financially protects a company. This coverage, however, may reduce the limits that are available for protecting individual directors and officers.
Depending on the type of D&O coverage you have, different losses may be covered. It’s important to work with a specialist in D&O insurance to ensure you’re getting the coverage best suited to your company and its risks. D&O-related claims can get very complicated and very expensive quickly. Hitchings Insurance is here to help get you the coverage you require.
What Won’t Directors & Officers Insurance Cover?
Directors and officers insurance will not cover intentional or illegal actions. If an organization fails to disclose material information or intentionally provides inaccurate information, the insurance provider may deny a claim due to misrepresentation. Criminal activity, illegal profits, and fraud are almost always excluded from directors and officers insurance policies. In addition, many D&O insurance policies will contain an “insured vs. insured” clause, where no claim is paid if a current or former director/officer sues the company. This reduces the chances of a company profiting from conspiracy or deceit.
Note also that D&O insurance won’t cover claims made against your business or its employees not serving as a director/officer for inaccurate advice, negligence or inaccurate information. For this, you would need professional liability insurance. Discuss a comprehensive business insurance package that suits every need of your business with a Hitchings Insurance representative.
How Much Does Directors & Officers Insurance Cost?
Similar to other forms of business insurance, the cost of D&O insurance varies widely depending on things like industry or risk profile. Businesses that have a lot of experience in their industry tend to pay less for their insurance overall, as they have more reputation built up. The average cost of D&O insurance ranges between $1,000-$2,500/year on average and varies based on these factors:
- Industry
- Risk profile
- Average revenue
- Company size
- Financial position
- Claims history
- Business experience
- Location
For a more accurate assessment of your total D&O insurance cost, request a free directors and officers insurance quote by filling out a form with Hitchings Insurance today.
Get a Directors & Officers Insurance Quote Today
Having been dedicated to being good neighbors in our community since our origination, Hitchings Insurance has made it a point to give back. Directors and officers insurance helps organizations, whether for-profit or not, protect their directors and officers against claims made alleging breach of duty or misrepresentation. D&O is essential, even critical, if you have any individuals serving on a board for your company.
Hitchings Insurance does its best to be there for its clients and help them in their time of need. We believe that it is essential to treat everyone with the same integrity and honesty, and we work tirelessly to make a difference in the lives of individuals and their communities. We believe that curating customized D&O insurance packages is critical to your non-profit, for-profit or private organization.
Get started and learn more about the Hitchings Insurance difference yourself by requesting a quote and filling out a form for your free directors and officers insurance quote today.
