In an increasingly litigious society, the individuals that lead and direct your organization are personally at risk of enduring time-consuming and resource-demanding lawsuits if the organization does not secure the proper insurance.
Directors’ and officers’ liability insurance protects the personal assets of the directors and officers against alleged errors or mistakes in carrying out their fiduciary duties and managing an organization. There are three primary legal responsibilities that directors and officers follow in conducting the company’s business:
- Duty of loyalty to the corporation – always proceed with the best interests of the organization.
- Duty of care – attain a reasonable level of competence before making decisions.
- Duty of obedience – uphold the charter and by-laws of the organization.
In addition, most policies include coverage provisions pertaining to the corporate assets of the entity, which has a legal obligation to indemnify its directors and officers.
With the growing need to insure this liability, Chivaroli & Associates retains in-house specialists who deal primarily with this coverage line. A thorough program analysis and a proper alignment of the policy provisions with your organization’s needs are extremely important in ensuring that all exposures are addressed. Without appropriately insuring against these potential litigations, organizational objectives may in turn be compromised, as it will be difficult to attract and retain topflight talent. Also, the executives who are brought on board may be reluctant to propose innovative, strategic business decisions due to fear of potential personal liability.