When a legal claim is brought against a director of a company, it is said to be for any actual or alleged act, omission or error judged to be a breach of duty in the discharge of his or her duties. This may be translated as financial mismanagement, or it may mean charges of wrongful termination. Claims often run very high. Directors and Officers for private companies helps cover a company’s legal fees when a lawsuit is brought against a director or officer.
Who Can Benefit
Claims of discrimination or sexual harassment may be brought against an officer of any kind of business. Regardless of the validity of the claim, processing it takes time and money. Affordable D&O policies are now available for companies of all sizes. Typically, an operation must have revenue of at least $500K to be eligible. Businesses that may benefit include:
- Auto Sales and Maintenance
- Business Services
D&O Provides Peace of Mind
Many directors in private companies have their own capital ties up into the business. Directors and Officers for private companies helps protect assets that otherwise might be lost to the courts. Another advantage to carrying a policy is that it may make the company more attractive to prospective hires. Having D&O in place lets a candidate know the company is interested in protecting its leaders and allowing them the space to do their job.