D&O insurance protects the directors and officers of a business or corporation if a lawsuit should ever be filed against them. This type of business policy is beneficial because it protects the company’s financial interests and helps to maintain its integrity. Doing business involves many different types of risks. With D&O insurance, your company is protected in several different ways if a director or officer should happen to fail to uphold the responsibilities associated with their position.
Breach of Fiduciary Duty
A breach of fiduciary duty basically implies that the officers and directors of the business did not perform their duties sufficiently. This may mean they didn’t identify or do everything possible to correct a problem that resulted in financial loss to the company, investors, or a client. This will also apply if a director or officer acts in their own best interests instead of doing what is right by the company. A director or officer who continually fails to fulfill their duties will eventually cost the company money in some way or another.
Failing to Remain in Compliance with Workplace Laws
There are several workplace laws that are in place to protect your employees. This includes various types of discrimination and harassment laws. Failure to comply with these workplace laws can, and will, result in a lawsuit in which the director or officer will be found libel. A quality D&O policy will protect the company and its good name from the acts of its director/officer if they are found guilty of any charges pertaining to failure to remain in compliance with workplace laws and regulations.
Intellectual Property Theft
Intellectual property can include written bodies of work, photographic images, and licenses for digital or interactive software. When intellectual property theft occurs, it involves copying or downloading data or information in a format that can be transported and utilized by another company or for a person’s individual interests. This can lead to unfair competition within a certain industry or trademark/copyright infringement.
Misrepresentation
Misrepresentation occurs when claims are made that are inaccurate. Being dishonest about how much a company makes or what its capabilities are just a few types of misrepresentation. If a company uses false information to earn a contract but defaults because it misrepresented its own interests, the management may be found libelous, resulting in extensive financial loss for the company. Misrepresentation is one of the more common D&O risks and can result in significant financial loss and possibly the termination of the employee.
Learn Everything About Your D&O Insurance Policy with J Archer Insurance Group
It’s essential to understand the risks associated with D&O policies. Any company, large or small, may eventually fall victim to this type of lawsuit. At J. Archer Insurance Group, we will help you find out what kind of risks your company may face. Our agents can provide you with the answers you need to keep your business in good standing and save its reputation. Contact us today to schedule a consultation and get the peace of mind you are looking for!
