A recent article on D&O Insurance (Directors & Officers) provides a good reminder of the importance of this coverage to protect the personal assets of Ds & Os. The article is in Property Casualty 360 and is written by Russ Banham, a prolific and talented insurance writer (see here). Key points include:
- D&O litigation is common and virtually routine in situations where one [public] company acquires another
- The possibility that the financial limits of protection afforded by a company’s D&O Insurance might be exhausted [should be of concern]
- [An additional coverage is available:] Side A insurance, a D&O policy feature providing direct coverage to an organization's directors and officers in situations where the employer is not legally required to indemnify them
- Today, it is the indemnification issue that most concerns directors and officers
Key takeaway: The D&O policy is designed to protect the personal assets of the directors and officers, and inadequate limits or the erosion of coverage from other exposures puts these personal assets at risk.
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