D&O Insurance and Risk Management

In early 2000, the market for D&O insurance, also referred to as Directors and Officers insurance, contracted and insurers offered decreased coverage and increased premiums. Less than five years later, the market cycled, generating more possibilities to negotiate extended coverage and premiums for D&O policies.

Insurer Longevity

Premium rates should be considered a priority only after ensuring that the provider is solid enough to be around to pay claims if necessary. Because of frequent industry changes, the company’s insurance advisors, directors and officers should perform the following tasks:

  • Review policies annually
  • Understand coverage provisions
  • Determine that it meets requirements
  • Regularly review indemnity deeds

D&O insurance is merely a safety net. It is not a substitute for compliance with a director’s or an officer’s responsibilities. Managers must be aware of the increased reporting obligations that impose fines for corporations not in compliance with requirements.

Maintaining Regulatory Compliance

Directors and officers are increasingly asked to represent corporations publicly and to provide interviews to the media. In order to maintain regulatory compliance, directors and officers should become familiar with their responsibilities and ensure that the corporation puts in place a compliance program that is regularly reviewed and tested.

When you need Directors & Officers insurance, make sure that you use the professional services of an insurance agent who can offer protection for your assets and those of your directors and officers prior to threats occurring.