Board of Directors and Officers celebrating because they have a insurance policy - Blue Lion Insurance Advisors

One of the most important types of commercial coverage offered by Blue Lion Insurance Advisors, LLC of New Jersey is Directors and Officers (D&O) Liability Insurance. Our team of well-established insurance advisors acts as an advocate for your company’s insurance needs. We have a combined 100-year history of providing customized, cost-effective protection to a broad spectrum of company directors and officers. Contact us today to make sure that your MVPS are covered. We will help you get the right insurance coverage, at the right price with superior service for your business.

What protection does a Directors and Officers Liability Policy cover?

A Directors and Officers Liability Policy offers coverage against personal losses incurred in lawsuits against prominent and/or supervisory individuals employed by your business or nonprofit organization. It is designed to protect the personal assets of your corporate directors and officers (and their spouses) from lawsuits brought by employees, vendors, competitors, investors, customers, or other parties. 

In addition to covering lawsuit settlements, such a policy can also help reimburse legal fees or other costs associated with the defense of these individuals. D&O insurance also typically includes financial support of a standard indemnification provision. Such a provision holds officers innocent of losses stemming from their role in the company. Officers and directors frequently expect the company that hires or promotes them to provide indemnification as well as liability insurance.

Our services can be of crucial importance in keeping your business afloat. Remember that both civil and criminal actions may be filed against your directors and officers simultaneously. Having our experienced advisors recommending proper risk management measures gives your business insurance protection that’s Blue Lion Strong™. The sooner you contact us at (732) 649-1600 or by filling out a contact us form on our website, the sooner we can help you purchase the best insurance for your company.

D&O Policy Exclusions

It is important to realize that D&O policies do not cover criminal acts. That is to say — if the director or officer being sued is found guilty of fraud, dishonesty, or willful violations of any statute, rule or law, the insurer reserves the right to recoup its expenditures.

There are many additional forms of business insurance coverage to adequately protect directors and officers, including:

  • Entity coverage
  • Payment priority for insured persons
  • Severability of the insured as well as severability of the application
  • Coverage over time—for past, present, and future directors and officers
  • Pay on behalf clause

Our knowledgeable insurance advisors will work together with you to determine which, if any, of these may be beneficial to your company. Do not hesitate in contacting us today to discuss your options or have our advisors give you a complementary evaluation of the coverage you already have.

Types of Lawsuits D&O Liability Insurance Protects Against

It will probably not surprise you to find out that there are a great many ways the financial and reputational stability of your business can be threatened through legal channels. No matter how many guardrails you have in place, your directors and officers may be sued for any number of reasons, including:

  • Failure to comply with workplace laws
  • Theft of intellectual property 
  • Encroaching on competitors’ customers
  • Breach of fiduciary duty 
  • Misrepresentation of company assets
  • Misuse of company funds
  • Absence of corporate governance
  • Fraud

As previously noted, intentional, illegal acts will not be covered by D&O insurance.

Why does your business need D&O coverage?

Although many business owners make the mistake of thinking that D&O insurance is only necessary for public companies, a  2018 Towers Watson survey found that private and nonprofit companies are also at risk. At Blue Lion Insurance Advisors, LLC, we recommend that all of our clients, whether their businesses are small or large, invest in insurance that may very well help them to survive the challenges presented by an unexpected lawsuit. 

Other reasons to purchase D&O Liability Insurance for your business include:

  • You will almost certainly need such a policy to secure venture capital or investor funding 
  • The well-qualified directors you want to attract will be reluctant to come on board unless you protect their personal assets with D&O coverage
  • In today’s climate, it pays to be proactive regarding potential employment lawsuits, such as discrimination, harassment, wrongful termination, and wage and hour claims

Contact us to experience the advantages of having experienced insurance advisors not only to evaluate your need for a D&O Liability Policy, but to help you surround yourself with the comprehensive coverage you need to protect the company you have worked so hard to build.

How does D&O coverage differ from Commercial General Liability (CGL)?

General liability policies provide your company with coverage for property damage and personal injury (usually under premises liability). D&O Liability Insurance, on the other hand, covers “wrongful acts” — the legal term for alleged or actual errors — such as:

  • Omissions
  • Misleading statements
  • Negligence
  • Lack of candor in offering legal advice
  • Illegal use of funds (e.g., insider trading)
  • Stealing clients from one’s employer
  • Working for your employer’s competitor

As you are no doubt aware, lawsuits alleging such wrongful acts can result in exorbitant defense costs, not to mention the expenses involved in repairing your company’s damaged public image. This is why it is so important to have a D&O policy in place to guard against possible catastrophes.

Be Proactive — Contact Our Superior New Jersey Insurance Advisors Today

Whatever type or size business you have, you want to keep your risks to a minimum. Our experienced professionals are prepared to help you protect your company in the most cost-effective way possible. We are also committed to providing you with the right Directors and Officers Liability Insurance, at the right price and with superior service. Call us at (732) 649-1600 or fill out the contact form on our website so that we can assist you in getting your business insurance protection that’s Blue Lion Strong™.

Schedule an appointment today to have an advisor give you a complementary evaluation of the coverage you currently have. Do not wait until you need this protection to find out you are not covered.