Why You Need D and O Insurance: Examples of Claims

Directors and officers liability insurance protects business directors from personal losses if someone files a legal claim against them. It helps mitigate the cost of legal fees, settlements and other expenses stemming from these lawsuits. Read about some D and O insurance claims examples below to determine if this coverage is right for your organization.

Examples of D and O Insurance Claims

D and O policies cover many claims types related to the wrongful actions of your directors and officers. These lawsuits may arise from various circumstances, including:

  • Improper Management of Finances: An officer’s failure to correctly manage a business’s finances may result in a legal case.
  • Intellectual Property Theft: Claims may arise when a director leaves a company, taking valuable information or licenses with them.
  • Negligence of Duties: When executives fail to file necessary reports, neglect to inspect records, miss crucial meetings or do not meet other requirements of their position, lawsuits may follow.
  • Judgment Errors: When officers in a company spread misleading information, disclose material facts or authorize false reports, affected parties may file legal claims against them.
  • Misrepresentation: If directors misrepresent your company’s capabilities or revenues, customers may sue them.

These many D and O insurance claims examples demonstrate the importance of securing adequate coverage to protect your company from potential financial losses.