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Director's and Officer's Liability Coverage is a
label for a combination of coverages designed for non-profit corporations, cooperatives,
for-profit corporations, limited liability partnerships and limited liability companies.
There are some coverages that are expected to be included, but there is no standard form.
The information we present is general information and incomplete. It always is a good idea
to read your policy because all policies have limitations and exclusions. It always is a
good idea to know if you should have it or if you don't need it. |
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Directors and Officers of an organization, whether
they are paid for their service in dollars or in the satisfaction they get by benefiting
the organization for which they serve, owe a certain standard of conduct and competence to
the organization.
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Failure to appropriately perform certain duties can cause
financial hardship for the organization by exposing it to liabilities that could be
avoided.
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Sometimes, directors and officers can be held personally
responsible for what they did or failed to do. This is what Directors and Officers
Liability Coverage attempts to address. |
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Simply, Director's and Officers Liability Coverage will pay, on
behalf of the organization and/or the directors and officers, those sums (subject to your
limit of coverage), that your organization and/or its directors and officers are legally
liable due to a wrongful act of any director or officer.
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A wrongful act can be anything, here's what usually is
excluded: |
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| 1 |
Libel and Slander. |
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| Bulk of exposure can be included in
Personal Injury |
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| 2 |
Use or misuse of insider information for
personal gain. |
| 3 |
Payroll received or paid illegally without
the Board's approval. |
| 4 |
Dishonesty. |
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| Consider Employee Dishonesty endorsed to
include Directors & Officers |
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| 5 |
Failure to procure or maintain insurance. |
| 6 |
If any other insurance exists, this
becomes excess coverage. |
| 7 |
ERISA related matters. |
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| Consider Employee Benefits Liability
Coverage |
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| 8 |
Bodily Injury or Property Damage. |
| 9 |
Pollution. |
| 10 |
Nuclear Hazards. |
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So what is usually covered? |
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| 1 |
Negligent Hiring |
| 2 |
Negligent Firing |
| 3 |
Negligent Training |
| 4 |
Negligent Supervision |
| 5 |
Harassment |
| 6 |
Wrongful Termination |
| 7 |
Discrimination |
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Should you have this or EPLI or what? |
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