Businesses need to protect all of those under its roof with commercial insurance. In particular, it needs to safeguard those in the highest reaches of the organization. After all, they often have the greatest pull over the direction of the company. As a result, their mistakes could badly affect the both the company and its clients. To protect executives, boards and other high officials, safety-minded organizations should invest in directors & officers (D&O) insurance. Let’s explore why this coverage can benefit any company.
D&O coverage is very protective of companies and executives in practice. However, it also can raise an organization’s profile in the eyes of potential talent. Therefore, businesses that invest in this coverage can often use it as a way to build future stability.
The Protection of D&O Coverage
High-ranking officials, like presidents, CEOs or boards of directors, often have a lot of leeway over a company’s future. Therefore, their decisions will impact the company’s progress. Just the same, if these parties make mistakes, they could put themselves and the business in a precarious situation.
Executives often are the main parties that face lawsuits following allegations of misconduct. Let’s say that a group of shareholders sues the company, and the executive personally, for misrepresenting company stock forecasts. Settlements and legal proceedings might ruin both the executive and the company. However, with D&O insurance, the business and official can both receive compensation to settle these costs. It’s valuable protection for situations where an executive’s credibility comes under fire.
Executives Appreciate this Coverage
D&O insurance provides invaluable protection. Businesses benefit from the protection, but individual insured officials often find it even more reassuring.
In essence, D&O coverage can protects the personal security of executives. As a result, businesses that offer this protection often extend a helping hand to their decision makers. Many prospective executives ask companies to invest in these policies before they join the organization. It’s a good policy to have, indeed. Companies that decide to invest in this coverage might find they have the best results in retaining existing managers, while also attracting new talent.
So, consider this coverage a valuable piece of protection for your business’s overall stability. Take a look at the assets of the company, as well as the personal financial investment of directors. You should choose a policy that adequately reflects that value. Some policies can start with $1 million in coverage and upward. Let your commercial insurance agent at 410-312-7800 help you determine the most appropriate protection. They can help you tailor your coverage to the most appropriate levels.
Also Read: D&O Insurance for Maryland Retail Executives