When you offer goods or services to consumers, there is always the possibility of liability. The people in your company who make major decisions are often under the greatest scrutiny. You need an executive protection plan that protects them. Moody Insurance recommends liability coverage specifically designed to handle the legal fees of those who are in charge. Your company may have a choice between a policy with a duty-to-defend option or reimbursement.
Duty To Defend
The D&O coverage of many small companies falls under a duty to defend. The contract obligates the carrier to cover certain expenses:
Once the total cost is known, the carrier can bill the clients for the portion for which they are responsible.
Coverage that is offered on a reimbursement basis can give larger companies or those that are publicly traded a little more freedom. The carrier has the right to address every claim but is not obligated to do so. Therefore, the client may be able to handle smaller or more frivolous matters in house rather than involve the insurance company.
Regardless of which option works best for your company, it is in your best interest to purchase a plan that protects your top executives. Such a plan empowers them to make strong decisions, knowing that the company has their back.