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Private Company Directors And Officers Liability Insurance

Private Company Directors and Officers Liability Insurance

Definition

Insures directors and officers of privately held companies against claims alleging mismanagement of the firm. Unlike publicly held corporations, the shares of privately held organizations are not traded on major stock exchanges. In addition, ownership is usually restricted to a small number of persons, typically the executives and managers who operate the company. As a result, the potential for high-dollar securities class action lawsuits is negligible under private company directors and officers (D&O) liability insurance. Consequently, premiums for private company D&O insurance policies are substantially lower than for comparable limits written for publicly held organizations.

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