Directors & Officers (D&O) Insurance
What You Need to Know About
Directors & Officers (D&O) Insurance
Since 1956, RJ Ahmann Company has been a premier provider of directors and officers insurance nationwide.
Wondering if your business should be protected by D&O insurance?
Many businesses struggle with this question. Litigation against Fortune 500 directors and officers is shocking, but it doesn't alarm most small-business owners. However, it is the small businesses who are being sued with alarming frequency. Below you'll find all the information you need to make an informed coverage decision.
Which businesses should have D&O coverage?
Becoming a director or officer of a corporation puts your personal assets at risk. A director or officer can be sued personally for decisions made on behalf of the company. If you answer "yes" to any of the questions below, your company should strongly consider D&O.
- Do you have outside board members?
- Are you finding board members reluctant to serve because of potential personal legal liability exposure?
- Do you have outside shareholders?
- Is your company undergoing a change in control, such as a merger, acquisition and restructure?
- Do you anticipate an initial public offering?
- Do you report your financial performance?
- Do you borrow money?
- Is your company subject to governmental regulation?
- Are you publicly owned?
According to the Watson Wyatt Worldwide D&O Liability Survey Report, companies with assets less than $100 million had a 12 percent susceptibility to directors and officers liability claims in 1997.
Why is D&O coverage important?
Directors and officers owe three distinct duties to the company they lead.
- Loyalty – They must put the interest of the corporation above their own.
- Obedience – Their actions must be driven by the corporate charter and bylaws.
- Diligence (Care) – They must demonstrate both expediency and knowledge.
Breach of these duties may result in a D&O lawsuit that puts the personal assets of the directors and officers at risk. Additional statutes, such as Sarbanes-Oxley, makes serving as a director even more onerous.
How does it work?
Directors and officers liability coverage helps protect the personal assets of your directors and officers from litigation due to alleged mismanagement of the company. It provides cash to pay for the attorneys defending them, regardless if they were negligent. It may even provide some defense of directors and officers accused of legal violations. It also can be extended to cover the company itself if it is brought into a lawsuit against its directors and officers.
Could your business survive an unexpected lawsuit?
In today's litigious society, and particularly in challenging economies, lawsuits are an expected part of business. In fact, most officers and directors face litigation at least once in their careers. If you're prepared with solid D&O protection, you'll be ready to overcome a legal challenge. If you're not, it could mean the end of a promising future.
A smart solution
If you need D&O insurance, or if you just want to learn more, RJ Ahmann Company can help. With more than 50 years in the industry, we’ve helped hundreds of businesses gain peace of mind with solid directors and officers’ protection. Our experienced D&O insurance experts will help you obtain comprehensive, cost-effective insurance coverage – tailored for your business’s unique needs. We represent a variety of “A”-rated carriers so you can rest assured that your livelihood is protected with stable, reliable coverage. In addition to protecting your property and liability exposures, we also staff a department with experts in financial planning who can help you develop competitive compensation programs to attract and retain key executives.
To ensure that you get the strongest insurance protection at the best rates, we...
- Take the time to really understand your business and ask the right questions to ensure you receive the right coverage for your unique needs.
- Help you understand and avoid the exposures unique to your industry, so you're never left vulnerable to unexpected coverage gaps.
- Develop smart, strategic and affordable plans to protect your company from potential D&O claims.
- Provide expert advice, answering all of your questions and collaborating with you as a year-round business resource.
- Offer a much higher level of business understanding and expertise than you'll find through your local insurance agent.
Ready to learn more? RJ Ahmann Company is ready to help with directors and officers (D&O) insurance solutions tailored to your business!