Directors And Officers Liability — Insurance Claims Definition
Liability
Coverage for personal liability of corporate directors and officers for alleged wrongful acts in managing the organization.
D&O insurance protects individual leaders when shareholders, regulators, or others allege breach of fiduciary duty, misrepresentation, or regulatory violations. Side A may protect individuals when the company cannot indemnify; Side B reimburses the company for indemnification; Side C is sometimes entity coverage for securities claims.
Examples
Shareholders sue directors alleging misleading financial disclosures; D&O pays defense and settlement subject to exclusions for fraud.
Common Mistakes
Assuming GL covers management decisions. Ignoring bankruptcy impact on Side B vs. Side A structure.
