directors and officers (D&O) liability insurance
Insures corporate directors and officers against claims, most often by stockholders
and employees, alleging financial loss arising from mismanagement. The policies
contain two coverages: the first reimburses the insured organization when it
is legally obligated (typically by corporate charter or state statute) to indemnify
corporate directors and officers for their acts; the second provides direct
coverage to directors and officers when the organization is not legally obligated
to indemnify them. In addition, a third type of coverage, known as entity securities
liability insurance, is usually available on an optional basis for additional
premium. Such coverage insures the corporate organization in connection with
securities it has issued. D&O forms are written on a claims-made basis, generally
contain no explicit duty to defend the insureds, and typically exclude intentional/dishonest
acts, bodily injury (BI), and property damage (PD).
Links for IRMI Online Subscribers Only:
PLI X.B-X.M;
D&O Coverage Guide