Directors and officers liability insurance (D&O) covers corporate directors and officers against claims, most often by stockholders and employees, alleging financial loss arising from mismanagement.
The policies contain two coverages:
Corporate reimbursement coverage reimburses the insured organization when it is legally obligated (typically by corporate charter or state statute) to indemnify corporate directors and officers for their acts.
Side-A coverage provides direct coverage to directors and officers when the organization is not legally obligated to indemnify them.
Additionally, a third type of coverage, known as Entity Liability insurance is usually available on an optional basis, for additional premium. Such coverage is for claims made specifically against the company.
Claims against directors and officers generally have been increasing over time with 31% of all companies expecting to have at least one claim made against its directors or officers, and each company averaging 0.87 claims.
If you are still unsure about purchasing Directors and Officers Liability consider these claim scenarios.
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for retirement and health benefit plans in private industry. It requires that those who establish plans and manage plans must meet certain minimum standards of conduct.
Under the ERISA act of 1974 (Employee Retirement Income Security Act), fiduciaries can be held personally liable for losses to a benefit plan incurred as a result of their alleged errors, omissions, or breach of their fiduciary duties. Fiduciary Liability Insurance is not required by ERISA. However, it is strongly recommended if you are a fiduciary of a welfare and/or pension plan because your personal assets are at stake. Many fiduciaries believe incorrectly that their ERISA fidelity bond protects their personal assets.
Fiduciary Liability is necessary to help protect private companies, their fiduciaries and the benefit plans they manage, against fiduciary liability claims.
If you are still unsure about purchasing Fiduciary Liability consider these claim scenarios.
Employment Practices Liability Insurance provides coverage for wrongful acts arising from the employment process. The most frequent types of claims alleged under such policies include:
Wrongful Termination - terminating an employee in a manner which is against the law.
Discrimination - unfair or illegal treatment of or denial of rights to persons on the basis of certain arbitrarily chosen attributes or characteristics, including race, gender, religion, creed, age, medical condition, pregnancy, sexual orientation/preference, physical appearance, marital status, physical or mental disability, or national origin.
Sexual Harassment - conduct involving unwelcome sexual advances, requests for sexual favors, and verbal, visual, or physical conduct of a sexual nature.
These policies are usually written on a claims-made basis so policies pay only claims presented during the term of the policy or within a specified time frame after the policy expires.
If you are still unsure about purchasing Employment Practices Liability coverage consider these Five Important Reasons for Employment Practices Liability Coverage