Directors and Officers Insurance

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Alberta D&O Insurance

Not Just for Large Corporations

Directors and officers liability insurance is a common expense for major corporations. They understand their top people wield a great deal of power and have a lot of responsibility, and that can extend to relationships with customers, employees, and other companies. D&O insurance protects these officers and the company from legal repercussions that result from actions of top company officials. However, even midsized and some smaller companies in Alberta should consider this kind of protection, because lawsuits are a distinct possibility in today’s litigious world. Let’s look at an example involving companies A and B.

Company A was enjoying its newfound prosperity. Six months ago they hired an exceptional young man to take over their Vice President of Operations position and he made some major changes that yielded a number of positive results. They now had many more customers and company profits had never been higher. Then one day, a major problem developed. Company B was suing company A and their new officer for theft of classified business information, customers, and intellectual property.

In the lawsuit, company B alleged that their previous company director left and took sensitive information with him when he joined company A. Some of the information concerned proprietary formulas and materials in which company B had patents and exclusive rights to. That is the reason for company A’s recent success and this caused severe hardship for company B.

Company A was in major trouble. Because they were a mid-sized corporation, the owner did not believe that they needed directors and officers insurance. Company A believed that their umbrella insurance policy would cover issues like these, but it turned out they were wrong. In fact, the new VP of Operations was guilty of theft and fraud and the lawsuit dealt an enormous blow to Company A. They never recovered and eventually could no longer stay in business.

Defining D&O Insurance

D and O liability insurance covers officers and directors of a company or organization, and their actions. When these people take any kind of business related actions they are essentially representing the company and this can affect customers, workers, and other businesses. This is especially important if company officers do things that are unethical, immoral, or illegal. In fact, if a lawsuit is filed against the company directors, D and O liability insurance helps to pay for damages and legal fees. These policies can be payable to the company officers or the company.

What Businesses Should Have D&O Liability Coverage?

Companies with officers and managers should consider protection. This includes not for profit organizations as well as those that are public traded. Private companies should also consider this coverage. This also includes:

  • Companies with board members
  • Company associations or organizations
  • Business partners
  • Businesses with multiple partners (including other company co-owners)
  • Stockholders with voting rights
  • 50-50 ownership situations

In addition, many smaller businesses should consider D&O insurance coverage, especially since the risk factors are lower than major corporations and insurance rates are very affordable. You never know when someone is going to sue you these days. In addition, most umbrella liability policies do not cover issues like fraud or theft.

Standard Directors and Officers Insurance

Most policies will cover legal issues like:

  • Demand for monetary damages
  • Criminal proceedings
  • Civil proceedings
  • Mediation or arbitration
  • Regulatory proceedings
  • Legal defense for fraudulent or illegal activity

Coverage can include organizations, subsidiaries, employees, managers, and advisory committees.

D&O Insurance Options

Options can vary according to the needs of the company, but they may include:

  • Personal indemnification
  • Expenses for investigations
  • Antitrust issues
  • Employment issues
  • Liability coverage extended to spouses or partners
  • Extension for foreign offices

In most cases, fines and penalties are not part the coverage.

D&O Insurance Coverage Can Be Confusing

When it comes to legal liability issues, there are many different things to consider. Moreover, it can get very complex when you add in all of the things that “might” or “could” happen. In fact, it takes more than just an insurance agent to understand these issues and advise you on the best insurance protection for your business. That is why you can count on Leibel Insurance Group when you need directors and officers insurance.

We are not here just to sell you insurance. We have highly trained and experienced professionals that understand the business and insurance industry. When you do business with our brokerage you will receive:

  • Exceptional service
  • Trusted advice
  • Innovative solutions for your business

If you check out a couple of insurance companies on your own, you may find one that has more to offer than the other. However, it makes sense to go with independent insurance brokers like Leibel Insurance Group. We do business with 8 different insurers for D and O insurance and we already know what they have to offer you. This gives you the very best coverage at rates you can afford.

Since 1981 Leibel Insurance Group has served the needs of Alberta businesses and individuals. When you add up all the experience in our company you receive over 250 years of insurance expertise.

If your business is not fully covered, you and your people are taking unnecessary risks. Contact us today for a free D & O insurance quote.

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