How to Determine Whether to Insure Directors and Officers

As a small business owner, it’s easy to cut corners where you think it will have the least impact. This is especially true when it comes to certain insurance provisions. Many small businesses don’t think about insuring their Directors and Officers, which is called D&O insurance. While it may be cheaper for you to only have a general liability insurance policy, you may want to rethink that mindset. A general liability policy will not cover your top level management in a pending lawsuit. In those instances, D&O coverage steps in. Here is a quick list to determine whether or not you need the insurance:

  • You have directors or officers
  • You have investors
  • The company can be held liable for an act resulting from a director or officer

If you have any one of these, you definitely need a D&O policy. This policy will protect your directors, officers and corporation in litigation and will cover the legal fees and other costs that may result. It’s better to have the coverage than risk losing your company or severely crippling it financially. For more information on D&O insurance, contact the Agape Brokers Insurance Agency.

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