Management Liability

Our Management Liability specialists average 15 years of experience in structuring risk management programs that protect against various types of executive risk and management liability. Strong relationships with insurance carriers and familiarity with current government legislation and case law mean we can effectively manage your risks in real time—an imperative in this ever-changing business environment.

Directors & Officers Employment Practices Liability Healthcare Other Coverages Professional Liability (E&O)
Overview

As an officer or director at your organization, you encounter a myriad of employment-related exposures. Sarbanes-Oxley regulatory mandates and increased shareholder activism mean directors are at risk for claims and elevated settlement costs.

The legal cost to defend a director is substantial, as are the potential penalties that can be personally incurred. Due to the personal liability risk – which is not covered under a personal insurance policy – protecting boardroom talent can be a challenge. A directors’ and officers’ liability insurance (D&O) policy is part of a comprehensive risk financing strategy.

Unlike a commercial general liability policy that provides coverage for claims arising from property damage and bodily injury, a D&O policy specifically provides coverage for a “wrongful act,” such as an actual or alleged error, omission, misleading statement, neglect or breach of duty. A D&O policy provides defense costs and indemnity coverage to the entity listed on the policy declarations, which may include:

  • coverage for individual directors and officers
  • reimbursement to the organization for a contractual obligation to indemnify directors and officers that serve on the board; and
  • protection for the organization or entity itself.

 

Indemnification provisions are typically included in the charter/bylaws of a corporation. While an important risk component, small to midsize privately held companies or nonprofit organizations often do not have the financial resources to fund the indemnity provisions, making the bylaws hollow. A D&O policy can provide an extra blanket of security in the event of a covered loss.